Raoul Pal on the BIG Crypto Picture

Raoul Pal on the BIG Crypto Picture

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docomo hi Ral pal here and welcome to my
show the journey man where I travel to
the Nexus of macro crypto and the
exponential age of
Technology now this is a special and I
know you like these they tend to get a
lot of views um it’s really again my
framework for understanding crypto it’s
part of the Festival of learning on real
Vision at real Vision we’ve been
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we’ve been teaching you about crypto
since day one since we first launched
and we said listen this is
important so here is my piece for the
Festival of learning that I’m specially
releasing here on
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as I go on a journey of Discovery
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hi everyone now as ever when I do a
presentation like this I was speaking on
behalf of not real Vision but of myself
Ral Al from Global macro investor and
also from exponential age the ass
management firm that I have a crypto
funer funds that a lot of This research
is from so you’ll see xam charts in here
just so that you know now to set this up
you’re all here for the Festival of
learning and it’s all generally about
crypto and how we look at crypto and
macro together to give us what we’re
looking for and I’m trying to teach you
how I look at this and there’s a lot in
this there’s going to be a lot of charts
to run through um but I think it’ll give
you a very cohesive picture and what I
want to get across to you
today this is the biggest macro
opportunity of all time I’ve basically
dedicated a lot of my life to this trade
now and many many other
in the space particularly macro players
have basically just given up trading
other
instruments and just gone towards crypto
because the world driven by the
everything code is basically all one
trade the debasement of currency by the
central banks and therefore you want to
own the best performing asset and if the
world is that simple it really does make
things much easier for us now this is
not for everybody not everybody wants to
take the kind of risks but this will
give you a very good idea of why this is
the biggest macro trade of all time now
when I first wrote about it in GMI back
in 2012 or 13 I said it then and I
stupidly should have just dropped
everything and just done this one trade
but I didn’t um but really I’ve been in
it full-time since 2020 you know the
sell-off in 2022 was the opportunity I
was looking for to add to the trade you
know I don’t believe that if you’ve got
a long-term view you should really try
trade around it should just keep
compounding um but others think
differently to that and I don’t know
what I’ll do this time around I’ll
probably take some lifestyle chips off
and continue to run the trade this trade
is the biggest macro trade of all time
and it’s not just about this cycle it
probably goes into 2030 and maybe well
beyond that so it’s a big one so anyway
pay attention everybody I’m going to
start to go through the charts of why
this is the biggest macro trade in
history firstly I’m going to start with
the everything code the everything code
is the
proprietary um thesis that we built a
global macro investor that we actually
now run our portfolio for xan you know
investing in the very best hedge funds
we use this everything code as the basis
and it’s the one where I discover that
the debasement of currency is kind of
everything and how it’s very cyclical
and it’s understandable and forecastable
as far as we can tell obviously things
can change nothing is a pure you know
perfe
but I think this is right and it seems
to be proving itself
outright so firstly we observe that over
time the trend rate of GDP growth has
been falling in the United States and
all around the world current Trend rate
of GDP growth is about
1.75% why is it falling if you remember
Trend rate of GDP is driven by three key
factors
one population growth two productivity
growth three debt growth so let’s
address these three factors firstly
let’s have a look at productivity
productivity has been declining over
time as the workforce has been aging and
that lowers the trend rate of
GDP debt on the other hand has been
rising but what we find is that
household debt growth actually stops in
2008 because the banks just stopped
lending to people so it’s just harder to
accumulate debt um also corporates have
also been paying off debt and have
really not been growing as fast as GDP
but really A lot of the jet debt growth
is now driven by the central banks as we
all know currently the US is running
massive deficits and is financing it by
issuing yet more debt and we’ll come on
to that in a minute but the key thing
here the thing that drives everything
for the everything code and the world
around us the return on assets the
inflation everything is driven by
demographics so here’s the working age
population age
15-64 Trend rate of growth it’s been
declining over time as the population
ages those people are less productive
the older you get the less productive
you are they had borrowed debts in their
early years and now a debt tapped out so
this explains a lot and I’ve talked a
lot about this on real Vision in the
past but we can also project
forwards and if you remember my piece
about the retirement crisis I’ve been
introducing this chart for a while which
is the labor force participation rate
versus the births deaths rate sorry this
is the births rate going forwards by 14
years and obviously the birth rate
drives how many people in the in the
labor force over time and it suggests
that participation of the labor force
should continue to fall over time now
we’ve had some pickup as um part-time
workers have come back into the
workforce because people don’t have
enough money and we’ll see some of that
too but over time we’re going to see the
labor force participation rate falling
because the replacement of new people in
the population is not as much as people
leaving the workforce and that is the
problem that slows economies it’s
affected Japan now affecting China South
Korea
Taiwan and most of Europe so anyway that
is the Mega Trend but this Mega trend
has some special
qualities when you strip everything out
and I keep saying demographics is
everything you find that the labor force
participation rate is exactly mirrored
by US Government debt as a percentage of
GDP so what it says is as the less
people in the labor force the economy
slows but there’s all of the services to
pay for for the old
people the government debt increases
that correlation is stunning and that is
an incredibly powerful chart to
understand the world we live in today
why governments keep issuing debt and
eventually when then having to print
money to solve it it’s all a function of
population so what they do with that
debt is they add liquidity into the
system that’s the debasement of currency
that I’ve talked about and you can see
the correlation between fed net
liquidity and the US government debt as
a percentage of GDP they’re basically
the same thing yes the scaling is
different but overall the trend is the
same so they’re using liquidity to pay
for the growth in debt by debasing the
currency it’s called Financial
repression
the other Stark thing that we found in
the everything code is actually the real
mechanism is that most of the government
debt increase is just paying interest on
existing debts they’re not actually
borrowing a lot more to invest in the
economy it’s basically servicing of old
debts and so there is a very strong
correlation
between um the interest payments from
the previous cycle and then the
liquidity for this cycle so I.E they
issue new debt it comes up for Renewal
they have they’ve already been issuing
new debt again this cycle so to pay for
the interest payments from the last
cycle they debase the currency via fed
liquidity so they’re increasing
liquidity into the system now look at
that curve that’s the that’s the
expected path here driven by the
interest payments from the pandemic debt
which was a huge increase in debt now
this debt keeps compounding obviously
cuz you’re adding debts on top of debts
on top of debts on top of interest
payments so I don’t expect it to play
out fully like this but we should expect
a big increase in liquidity going
forwards and that’s crucial to the
theory you see look at that trend of
total liquidity think of it again in a
different world that is the ongoing
trend of debasement of
currencies that when you debase the
currency gives you
an optical illusion that asset prices
are
rising so this chart of the NASDAQ
versus the total liquidity index shows
how correlated they are it’s actually 97
a half%
correlation now the NASDAQ actually
outperforms this because it’s a sec
secular Trend but this debasement
explains almost all of the movements of
all assets over time which is why
everything is so correlated yes some
things lead some things lag but this is
the crucial chart to understand the
answer to the demographics is more
debt the demographics is causing a
slower um
economy and to get over that they issue
more liquidity debase the currency to
pay for it that makes asset prices rise
this is the everything code and it’s
really important you see most people
don’t
understand that this is the global
liquidity index from the major central
banks it’s growing at an 8% annualized
rate now once you add in global
inflation and let’s call Global
inflation about
4% you’ve got a 12% hurdle rate for any
investment now that’s pretty staggering
because if you think about the S&P 500
it does about 12% a year so basically
you’re not getting ahead by doing it
your savings aren’t auring future value
just present value
this 12% hurdle rate is a huge problem
for people if you don’t understand it
you are basically getting poorer if you
don’t hit your 12% so if you’re just
investing in bonds and think it’s a good
idea to get the 5%
interest well you’re actually your
future self is getting
poorer hey you if we enjoying this why
not sign up for the YouTube channel so
all you need to do RP the journeyman or
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out see it
there so when we look
at Global
equities versus the total liquidity
index we’ve seen that since 2008 from
the crisis when they started printing
money it collapsed but then it’s been
sideways ever
since so they’ve basically offset the
balance sheet but done no better and if
we took it from 2007 before the big
printing started it’s actually lost
2.54% a year versus the debasement so
you’ve been poorer for owning equities
generalized Global equities than um than
the debasement itself so that’s cost you
money when we talk about
crypto I use the chance of Bitcoin here
because Bitcoin has the longest price
history it too is stunningly correlated
with global
liquidity you see Bitcoin has an 87 a
half% correlation not as high as the
NASDAQ because as you can see it’s the
periods of
outperformance that lowers that
correlation when we start to get you
know full kind of mania you know Crypt
Mania cycles that you get in this
exponential asset because it is a much
more exponential curve um because it’s
driven by Tech adoption um and we’ll
come on to that in a second as well but
you can see
that liquidity is the driver of Bitcoin
plus
technology but when I look at Bitcoin
versus global liquidity it’s
outperforming the debasement by 105% a
year I mean that’s a staggering
difference versus global equities which
are not doing anything at all and are
probably
negative that’s a huge huge difference
in your future purchasing power which is
why this is such an important asset and
again I’ll come on to more of this in a
bit but we’ve ascertained that
technology stocks are in a secular bull
market they’re 97 and a half% correlated
but they’ve been rising very well Over
time however when you look at NASDAQ
versus Bitcoin this is a crucial chart
so NASDAQ is the best performing Equity
Market in the world essentially but when
you look at it versus Bitcoin since this
period of debasement NASDAQ has
underperformed by
99.93%
just wrap your head around that and it
doesn’t stop it’s underperforming by 45%
a
year and as you can see we’re going to
break to new lows and this chart will
just continue as Bitcoin and crypto eat
the world it’s something I call the
super massive black hole I look at
Bitcoin charts versus every asset and
they’re all the same they’re all down
99.9 something
per. and then I look at relative values
between Bitcoin
and ethereum or Bitcoin and salana and
that’s where you get to choose what you
think the fastest horses and that’s why
I chose salana this cycle but basically
crypto is the super massive black hole
the asset that appreciates it’s faster
than anything else and on a risk
adjusted basis
too so what’s driving
this well what’s driving this is
obviously the debasement of currency but
why are the other 105% excess Returns
versus that well it’s this
chart this is starting the internet at 5
million IP users and crypto at 5 million
wallets active wallets so yes I know
that they neither of them are perfect
measures but I’m not looking for
Perfection I’m looking for understanding
and what we saw is the internet which
was the fastest adoption of Technology
the world had ever seen it GRS 76% a
year and then slowed down after year
eight to 43% a year crypto has been
growing at
137% a year it’s now at 516 million
users versus 187 million of the internet
at the same stage and then what we did
is ass assume that crypto just slows
down its growth to the same as the
internet I don’t think that’s going to
happen I think it’ll be faster but it
gets by um 2025 the end of 2025 we get
to 1.1 billion users so that will be
double the pace that the internet
grew and because this is a network and
the tokens are at your participation the
network they go up a lot it’s as simple
as that it’s meta’s law
so when you’ve got the biggest
technological trend of any asset class
in all of history you’re going to make a
lot of money if that Trend continues
this is why it’s the biggest macr trend
of all time but it goes on if we look
out further using the internet adoption
growth and we slow down the trend rate
of growth of crypto to the same as the
internet going forwards we get to 4
billion users by 2030 that’s half the
world’s
population now will this be perfect it’s
been pretty perfect so far I’ve been
showing this chart for 5 years now but
let’s assume not either way these
numbers are simply
staggering and that’s why you’ve get
that log chart of Bitcoin over time
because it’s the adoption curve is what
you’re seeing which is why the sell-offs
even though they they sound terrifying
down 75% are just blips in the overall
Trend and over time it just keeps
compounding
growth you see to show how starkly this
compound’s growth this chart um of all
of the asset markets since 2011 I think
is is hilarious so you’ve got the usual
NASDAQ blah blah blah so we can look
ignore the top three for a second NASDAQ
177% beating the debasement that 12%
number and compounded 800% since 2011
that’s a [ __ ] good investment what a
great investment that nasdaq’s been then
we go up look at the top Bitcoin
Bitcoin every 3 years is the worst
performing asset every the next three
years in a row it’s the best performing
asset in the world and even with the
draw Downs those scary draw Downs
everybody hates it’s compounded 20
million per return s since we started
talking about Bitcoin on real Vision in
2014 it’s up
450,000 per. its annualized return is
139% that that’s mindblowing right we’ve
never ever in history been given an
asset like
this but when you go out the risk curve
a bit to newer crypto getting up the
risk curve getting up the adoption curve
well in 2016 out comes ethereum out of
the gate monster returns huge draw Downs
compounding returns 364,000
annualized at 149% which is better than
Bitcoin salana came last cycle again
came out of the gate fell
94% what are the compounded returns
7,713 which is
200% a year right so there is no asset
class in all of history that’s ever
performed like this even with the draw
Downs this is why I keep saying to
people you just want to buy and hold
them and if you can make the right
switch amongst the big ones as the next
big Network gets adoption you’ll make
even more compound returns right this is
the biggest gift we’ve ever been given
as investors and it’s the biggest macro
trade of all
time let’s go back to the risk reward
topic here’s yurian Tim’s chart that
I’ve stolen from him um which is on the
left is all of the bubbles of risk
rewards of assets and how they look
pretty typical and this is how asset
allocators think about it but when you
add in Bitcoin you end up with a massive
blank page with at the very top right
this [ __ ] alien risk reward which is
Bitcoin
crypto is a complete alien in time in
terms of performance and risk reward
this chart includes the draw
down of
2022 so you see again I keep saying it’s
a gift and people still don’t really
understand what a gift it is it’s
something unlike anything we’ve ever had
in history and it gives us a hell of a
chance to make money
so to sum up what the biggest macr trade
of all time is it’s crypto going from
2.7 trillion where we are
today to let’s say 12 trillion by the
end of this cycle and onto a 100
trillion within 10
years and you’ve got to
understand this would be the fastest
accumulation of an asset class in all
recorded history in the shortest period
of time time it’ll have driven the
highest returns of any asset class in
all of recorded history in the shortest
period of time in fact in any period of
time and it will be the fastest
accumulation of wealth the world has
ever seen in the shorter period of time
if we go and generate 90 90 odd trillion
in wealth in the next 10 years to put
that number in perspective because we’re
all getting bored of such big trillion
numbers
that is the S&P 500 is $50
trillion that is the accumulated worth
of all the companies that have succeeded
and failed and grown over time driven by
the US
economy it over the last 100
years is 50 trillion it’s double that
and you’re going to do it in 10
years it’s a global wealth shock on a
scale never seen before in history it’s
like all of the Baby Boomers coming in
and saving all at the same time in 10
years they entire life
savings
plus all of
China coming in from the WTO as that
opened and the wealth that generated
plus India opening up plus all the
Russians added together and probably
doubled right this is the scale of what
could happen here as assume R is a [ __ ]
it’s always a good thing to do maybe I’m
R discount Me by 50% discount Me by
75% it’s still at 25 trillion it’s one
of the largest increases in global
wealth the world will have ever seen
this is why it’s the big macro
opportunity this is why so many of my
friends and colleagues famous macro
people have just walked out of the old
world into the new world because it’s
like this is the big one
macro people look for the big trade you
know it was the subprime crisis all of
that but the returns coming out of this
space to off all of those opportunities
added together gone of the days where an
incredible macro year would be pull Tuda
Jones up
100% people in crypto get that regularly
that’s a pretty lackluster year and in
fact you expect to see several 100% so
look it’s mind blowing anyway that’s
enough of the dream speak let’s get on
to the liquidity cycle and how it’s
driven because you need to understand
that so liquidity is cyclical as I
explained before here’s the chart the
dot chart of the um correlation between
Global liquidity and Bitcoin very tight
87% correlation so we we know
that we also know that we can construct
a global macro investor a lead for
liquidity it exactly caught the loan in
Q4 2022 that’s when we kind of doubled
down and went super long technology and
crypto because that was the botom that’s
when everybody else was getting Max
bearish we got Max bullish using
liquidity um the only other person who
really use it in the same way as Mike
how um and he does some great work as
well but we’ve really gone down the macr
crypto we have more macr crypto
understanding a global macro investor
than certainly anybody else in the world
and how this all links together
and I won’t show all of it now but I’ll
show you some so that was the low that
we chose in Q4 2022 all cataloged in GMI
all cataloged in real Vision Pro macro
you know we do everything out in the
open so this is not us saying oh yeah we
bought it wink wink no we did it’s all
cataloged anybody who’s to subscribe to
those Services know well what we did and
since then it’s been
34% now what’s interesting is the
everything code helped us understand how
to forecast liquidity into the future
again we’re not expecting Perfection but
you’re expecting the Cycles to play
out so here’s the ism with a 15-month
lead and the global liquidity why the
ism leads is because it’s actually
inverted there it’s because the business
cycle keeps repeating because of the
debt refy cycle I’ve talked so much
about so what we are is it confirm some
of the other charts I showed you before
we should start to see global liquidity
pickup going into election years that is
very typical you know we’ve got the
commercial real estate to deal with
we’ve got how the hell are they going to
keep issuing bonds to pay the interest
when bond yields aren’t coming down
something’s got to give and liquidity is
going to give it to them so we know it’s
coming we just don’t know how it could
be in a new mechanism which is the Basel
4 agreement which allows which forces
Banks to hold more treasuries the can be
a number of ways we do this we will also
maybe see a massive release of the
treasury general account over the
election period that’s possible too we
don’t know where it’s going to come from
it’s unlikely to come from straight
quantitative easing because everybody
knows what that is now so they’ll find
ways of obscuring what they’re doing
which is making you poorer they’re
basically taxing you every year by about
8% by devaluing um debasing the current
in fact the FED have actually been
debating faster than others at some like
15% a year if you just use the balance
sheet but anyway let’s use that Global
number we’re also starting to get the
rate cutting cycle coming in now rate
cutting doesn’t actually go into the
liquidity but it’s part of the things
that show you that the central banks
want to move towards liquidity we’ve
just started the cutting cycle started
in Latin America with Brazil we’re
starting to see it across Europe we’re
starting to see it elsewhere and the
next two years will be the feature of
cutting rates sure maybe rates don’t go
as low as they were before maybe there’s
only a few rate Cuts if you
remember or many of you won’t but 1994
was the bond market blow up the FED
raise rates a lot everybody blew up
Banks went under very similar to
2022 1995 everybody expected the FED to
cut
rates several times they actually only
twice 75 basis points in two goes and
then went on hold for years
essentially now most pundits in the
market say well if they don’t cut rates
as much as the market was expecting it’s
going to be terrible answer was back
then the stock market Rose
150% before super accelerating on a rate
cut in 1998 and we got the NASDAQ Bubble
at the end of
that so I don’t see any issue markets
like
stability and if they cut rates a bit
because Jal needs to they’re going to
have to some figure some other way of
doing the interest payments of paying
the interest payments and what will
happen is markets will continue to R
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tocom chinai okay so let’s forecast out
liquidity a bit further using the
everything code so we saw that chart
before this is ISM going forwards
last time I showed you the ism versus
liquidity here’s ISM going forwards
which says the business cycle is going
to rise this is why currently cyclical
stocks Commodities are rising because
the ism is starting to pick up but we
can also forecast it
out and it gives us a peak in global
liquidity in um September 2024 so this
year we’ll see a peak don’t worry a peak
is not a peak of markets this is a year-
ofe rate of change we don’t end up
getting to negative liquidity until
December
2025 so this is why I think this cycle
runs between now and it started in 2022
sometime in
2025 somewhere probably towards the lat
normally the crypto market end in
December maybe comes a bit sooner we’ll
have to be on alert for that but
basically this is how we see liquidity
playing out again don’t expect
Perfection I’m not expecting to be
perfect but it’ll give you a pretty
decent idea you don’t need a massive
liquidity cycle either you don’t need
2020 to drive these things up you just
need liquid liquidity to be positive and
stay positive for markets to work their
magic now those forecasts if I use the
log channel of global liquidity using
everything code forecast doesn’t look
unreasonable doesn’t look unreasonable
at all
now it might not get to two standard
deviations maybe it’s one standard
deviation like it got to in
2017 remember the crypto market then
that was La La Land 2013 one standard
deviation a
complete wild crypto market so again you
don’t need the massive liquidity you
just need liquidity and so that’s where
we think it might go let’s see how it
plays out that corresponds with the log
channel in Bitcoin obviously and that
would give us something like a forecast
of around 270,000 by the end of this
year again please don’t hang on to my
forecast say R pal forecast 270,000 this
year that’s not what I’m trying to do
here what I’m trying to do is
contextualize stuff for you and say
listen between now and the end of the
year it’s going up a decent amount is it
150,000 is it 250,000 is something in
the middle I don’t know and I don’t
really care and nor should you people
get too hung up on forecast when this
asset is just going up over time anyway
it means this year we’ll be a very
strong year and we can plug in some
forecasts and I don’t like giving these
out to people because people again will
take this out of
perspective they will say Ral pal
forecast $400,000 Bitcoin headline
that’s [ __ ] what I’m saying is using
our model we see significant continued
upside into 2025
where then incred liquidity starts
falling and so sometime around the
second half of the year we will see a a
topping pattern in in Bitcoin and
therefore crypto and it suggest that it
should be strong even if you half my
targets not targets half the analysis
that comes out of the model that’s still
a great year that’s my point please do
not tell me that I’m forecasting 400
$1,000 Bitcoin I’m not going to take
that because people deal with it
irresponsibly and that’s not the right
thing I’m just saying it’s going up a
lot also fed liquidity is the driver of
the eth Bitcoin cross which is a proxy
for altcoin
season now it’s very interesting because
we’re now coming into the
harving and it was roughly at this point
back in 2020 the eth started bottoming
versus Bitcoin and then took a while to
base and then went up like a rocket ship
for the entire next year I managed to
capture that entire
Trend and it’s very normal for crypto
summer um spring for Bitcoin to
outperform and then as we come into
crypto summer that we’re transitioning
into now e starts to outperform bitcoin
this is a terribly unpopular thing to
say because people say well eth is dead
it’s a dead chain it’s not working blah
blah blah blah BL just wait have
patience you will see will it outperform
salana I very much doubt it salana is
earlier in the adoption curve so it
means the percentage changes a larger so
that’s how I see it with that you can
see the
start of crypto spring which was the
breakout of this pattern and the slight
acceleration that’s as we’re getting to
warmer days of spring as it
were but really summer happens when you
break the previous all-time high in
market cap and things go utterly bananas
so this is X ethereum so this is the
rest of the space really starting to
accelerate and sometime in
2024 we will hit alltime High market cap
of alt coins and this chart will go
truly into the banana Zone which I know
is a very fun time people lose their
[ __ ] minds in this period and I’m
urging you to remember my rules about
don’t use
leverage keep top three top five market
cap tokens if you are going to go out
the risk curve do it for 10% of your
capital or less just be careful out
there don’t [ __ ] this up this is a gift
but you can screw it up by getting
greedy getting fomo and doing stupid
[ __ ] you shouldn’t do just don’t do that
if you want to have some fun catch a Al
coin season do it with your 10% who
knows you might make a 10x on it chances
are you’ll end up with a bunch of
embarrassing stuff in your wallet that
goes to zero over time that’s the way it
works but your eth salana Bitcoin I’ll
do just
fine okay let’s talk about kbo summer
just in a very simplistic terms here’s
the chart of the
seasons so spring is green we had a
great spring this year
summer is when a lot of the gains start
to
happen fall was tricky last time around
we got a stunted
cycle if you remember that kind of
double toppy style thing was highly
unusual 2017 2013 were more typical
obviously of the full
season and so we don’t know how this
one’s going to play out I think it plays
out more like 2013 2017 but it’s all
assessing the odds as we go but right
now this is the easy year the summer so
we should just be set it forget it and
let the games
accumulate and then very
soon very soon like in the next month
next month and a half we will start to
hit the banana Zone and this is what
happens when you hit the bananas and
things get absolutely
wild which is the really magical part of
why this is the greatest macro trade of
all time is this part and it’s coming
will it look the same as others who
knows some have been absolutely crazy
others were more difficult like the last
cycle but that’s usually what happens
when we hit altcoin season from Summer
and then into fall things get really
really exciting now at exponential as
ass management I won’t talk much about
that is we actually build a whole
portfolio allocation of where we want to
be on the risk curve using lots of
factors that Julian Bell has put
together from the everything code
valuation percentiles volatility uh
where we are in Old season different
measurements of all of this these nine
different things and then give it a
total score right now we’re at 9.2 out
of 10 so almost at Max risk- taking but
we’re not there yet because we haven’t
got um we’re not fully Into Summer but
that that day will come and we allocate
to managers according
this kind of risk scoring is just the
summary of what I’ve been talking about
is right now this is the time to take
risk don’t use leverage be careful what
you own have fun out there and do it
right so hopefully what I’ve done here
is try and teach you why this matters
why you should in this Festival of
learning listen to other people and
learn some
skills how not to [ __ ] this up which is
crucially important because you’re being
given a gift
why it’s such a big gift how ridiculous
the returns have been over time and are
likely to be going forwards obviously
there’s no guarantee but I don’t see
anything changing how the everything
code plays into this how the the
refinancing of debts every four years
creates a four-year cycle that happens
to correspond with the Bitcoin harving
cycle and the US presidential election
cycle how that breaks down into
different seasons
how liquidity plays into this and how
demographics play into it and how
liquidity is being used to debase your
currency making your future self poorer
and then I’ve shown you how crypto fits
into your portfolio to offset not only
the
debasement it’s a life R for your asset
but it’s also happens to be an asset
that goes up more than any other asset
of all and this is not funny internet
money it’s actually driven by macro it’s
driven by the business cycle like all
other assets are it’s driven by the
liquidity cycle which happens to be we
think pretty
forecastable yes it gives some crazy
numbers for
performance and again they’re not my
targets I don’t really care where it
gets to in price because the next cycle
it’s going to be higher and the cycle
after that higher even if the returns
lower over time maybe they don’t there’s
a big thesis out there that that we will
get tapering returns and the log channel
of Bitcoin is the wrong way to look at
it I don’t see any evidence of that in
the NASDAQ that’s been a powerful log
channel for a very long time now I don’t
see any reason why you need to get lower
returns but maybe we do I’ll worry about
that when we get to 4 billion users so
in a nutshell this space is going from
2.7 trillion in market cap it’ll get to
something like 10 12 trillion in this
cycle it’ll then have an inevitable bare
Market whether it’s as big as the
previous bare markets or not we can’t
tell we’ve now got new participants
putting in their 401K money every two
weeks maybe they all Panic out nobody
knows but it doesn’t matter because
those sell-offs are the opportunity if
you can take some lifestyle chips off
protect yourself in the great crazy days
uh later this year here and then you’re
fine then you can run it if you want to
you don’t have to I
will and then you can add into the bare
Market when everybody’s scared because
you’ve got a
plan this is the plan this is the
framework that you need to have
confidence just keep
going
anyway as I always say good luck out
there the biggest macr trend of all
time let’s see if we can be part of this
generation this generating of wealth the
let’s say 90 something trillion of
wealth that’s going to come because that
will truly change your life and your
family’s life all right take
care okay well I hope I got across to
you all the things I was trying to
explain in the video how big this is how
not to [ __ ] it up how important this is
and again I’m going to reiterate the
don’t [ __ ] this up don’t use Leverage
because it’s a way people to take your
coins store your coins carefully don’t
let anybody else have them I think most
of the big exchanges are safe but to be
extra safe I don’t really leave stuff in
exchanges it’s all in Cold
Storage yeah it’s a pain to set up but
once you do it you feel
safer then don’t Foo into stupid [ __ ]
because your friends are making money or
you’re seeing some bloke making money in
a mean coin if you want to do stuff
outside of the three or four big crypto
um
cryptocurrencies then do it with 10% of
your money there you can have fun there
you can be a gambling filthy
dgen but don’t don’t do that with the
bulk of your assets because you think
you’re never going to get a chance how
you going to grow your two grand it will
compound over time just trust me on this
and then you can play for the 100 X’s
whatever you do you will probably lose
money in that uh in that 90% bucket when
I look at my own allocation my own
allocation is probably
1% um memes and [ __ ] like that most of
it is just straightforward and I don’t
use leverage and even though I’ve used
leverage over years I don’t want to use
leverage in a market that is this
volatile
anyway remember this is just part of the
education go to real Vision I beg you
real vision.com and just smarten
yourself up get turn the information
that you see into a world of knowledge
and wisdom and the Festival of learning
will help you do it and if you’re
watching this after the Festival of
learning’s taken place well you can
watch the the the reruns of it there
plus all of the education we’ve got on
real Vision you can talk to the AI ask
it for questions of how to understand
you know the terms that people use how
to understand what liquidity is how to
understand all of this it’s all there
for you we built it for you anyway enjoy
yourselves get some education and let’s
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Raoul Pal joins us for one of his legendary solo episodes explaining his thought process on the crypto and macro big picture. Get your RV notes app ready because this one is packed with charts and might even require a second viewing. Enjoy…! Recorded on April 8, 2024.

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