Crypto Gathering 2023: Key Takeaways with Raoul Pal & OSF

24:18Hey, everyone. We're going to take another quick break and hear a word from our partners. We'll be right back to the Real Vision Crypto Daily Briefing.

24:316529 mentioned something, as he often does, that makes me stop and think. And he just said, we're too obsessed by current form, which is like, it needs to look like this, it needs to be that. is like, you know, the elements of, I guess, 3D plus animation plus other things, things will likely come from this cycle and will take the world by storm again. I just don't know what that is. But how are you thinking through some of that? Have you seen anything interesting yet? Yeah, I think you're starting to see. I mean, who's the guy? I mean, the one that blew me away. I can't remember his name now. Rafiq?

25:11Rafiq? Rafiq Anadol, yeah, yeah. Oh, my God. I mean, that is like... That's a perfect example of it. His use of data science and his final output mediums are just insane. These are things that never existed like 40, 50, 60 years ago. You know when someone says, why does it need to be an NFT or why does it need to be digital art? Why can't I just buy a painting? Well, Rafiq is your answer to that. Try and make a painting of what he does. You can't. It's physically impossible. But, yeah, you're going to see more of these mediums. just the concept of being able to own a piece of art that's animated, that would have been very foreign decades ago.

25:48It's now no longer foreign. It's very normal. So we're going to see things like that as the technology improves and as we go on in this journey. I don't know, things like 3D artists being able to create projections that are then NFTs, and you can have a little projector that displays it and connects to your wallet. That's just some random thing that I thought was on the spot. But that kind of stuff is what we're going to see more of in the future, which I think is incredible to get different outside-the-box mediums for art. Yeah, because they become digital objects and not just digital two-dimensional art.

26:21And that becomes fascinating. Yeah. I do believe, I think for digital art and NFTs to succeed, we do need to move beyond just viewing them on our phones and viewing them on our screens and stuff. I know that's great and it definitely has its upsides, but people need to the normies need to see things in the flesh to really be able to appreciate it and that's when they understand a bit more you know if you have like a load of we had a display up on uh on Oxford Street recently um on the outside of the finals with W1Q8s and like people get that like someone walks past and says wow that's really really cool and it's like hey well can actually own it, here's how you own it and stuff.

27:04That process of motion works so much better than, oh, hey, look at my phone, by the way, you can own this. We need more of that for it to succeed, but I think we will get more of it. RAOUL PAL, right. Let's move on to the market overall, the crypto markets, because you're active in that as well. Where do you think we are? where do you think you're going? And how are you thinking about risk, where you want to be on the risk curve, that kind of stuff? RAOUL PAL Yeah, I think there are now multiple confirmations that we are at the beginning of what everyone might call the bull cycle. I think we very clearly bottomed in June last year, we had this long period of consolidation.

27:48And then things started to get better in the world. From the macro standpoint, we've watched inflation drop from 9.1 % to 3%, which is 1 % above the Federal Reserve target for inflation. How crazy is that? The risks of that, everyone's like, well, we're going to get into a bad recession, people are going to lose their jobs, blah, blah, blah. Well, guess what? The US economy is pretty fucking strong still. RAOUL PAL And guess what? Markets went down 85 % last year. What more do you want? Blood? RAOUL PAL Exactly. That negative scenario was priced in because that's how people react. And then we're now starting to price in the positive scenario because that's where it seems like the probability is.

28:26But I think we have a lot higher to go. I really do. I think that's probably true mostly for crypto. As it stands, I know this is a very simplistic way of looking at it, but the S &P 500 is about 6 % off its all-time highs. Nasdaq is about 3 % off its all-time highs. Bitcoin is 55 % off its all-time highs. Ether is 60 % off its all-time highs. And let me not even mention any of the altcoins out there. Because those numbers are still probably 70, 80, or maybe even 90%. So we are at the beginning of a bull cycle of crypto. And you have multiple macro narratives that I think are very, very bullish.

29:02But you also have crypto-native narratives too. You've had the blow-ups of last year. All that's washed out and cleaned up. You've had the leverage taken out of the system. You've had a lot of the bad actors removed. And now you have the two of three of the world's largest asset managers in the world. In fact, Larry Fink, again today, the largest asset manager in the world, they managed whatever it is,$9 trillion of assets, saying out there spewing bullish stuff about Bitcoin. You have to understand, Larry Fink is not filing for a Bitcoin ETF because he's bearish on Bitcoin. He's not filing for it because he thinks it won't get accepted.

29:36He's not filing for it because he doesn't have demand. He probably has so much demand for it. And I think when we start to see these numbers, once the ETFs get approved, and you start to see the numbers of, hey, BlackRock just raised X million or billion dollars, probably billion dollars, whatever, ETF for Bitcoin. Now, they want to do it for ETH. Fidelity just did it. Now, they want to do it for ETH. Now, Bangor, I want to get involved. And it will just create so much real demand for crypto. We're before that. We're very early at this point. And, of course, the ripple thing yesterday, I mean, as if you didn't need another surprise positive casters for crypto.

30:07There you go. There's another one right there. just all the SEC stuff completely out the window with that. And that makes a strong case for altcoins to now rally, and Coinbase will fast act there, I think, as well. RAOUL PAL Yeah. So how I'm thinking about this as well is like, we know about the ETF. It looks like I would give it like a 75 % chance, something like that. So it's pretty certain. Let's say they inject 10 billion of new liquidity into Bitcoin. How risk markets work, and again, you understand this because you've always traded the riskier end of the markets, traditional markets, is the money that goes in here gets recycled and goes down the risk curve.

30:48And$10 billion in Bitcoin is very different than$10 billion in Solana, because the market couldn't take it. But so it creates this whole move in the risk curve. While everybody now thinks, well, this all means it's Bitcoin dominance all the way forward because of the ETF, I think it's the opposite. completely the opposite. I totally agree. I think a big reason for Bitcoin dominance this year was Bitcoin is not security. Everything else is. And that's now changing. But look, we all bought ETH and Bitcoin last summer because we didn't know what else to buy. We knew that was safe. And we would buy those and DCA on those until we got to a point where the world is slightly changing.

31:29We think things are getting better. Now, it's time to move down the risk spectrum because I don't want to just try and make a 2x or 3x or 4x on ETH. I want to try and make that next 10x, 50x or 100x. But the probability of achieving that is much higher now than it was last year. And of course, nothing really did that in the last 12 months. So I totally agree. People will start to sell their Bitcoin and start to sell their ETH and the other large cap to chase returns for higher risk assets. Because at the end of the day, if you're a Bitcoin maxi or an ETH maxi, whatever it is, you'll be sitting there, you'll be watching some random coin go up 1 ,000%, 2 ,000%.

32:03And you'll be like, well, I need to get involved in this stuff. Now's the time to get involved in it. And that's how I'm thinking about risk now. I've been through this period of averaging down on majors for the last 12 months. But literally two or three weeks ago, I had a long conversation with Mando. And we were like, now's the time. This is it. We need to change our portfolios. We need to have more risk in it. And it's not just about owning ETH anymore. And whether it's having levity, whether it's having other tokens that you think can give you a higher beta on returns, whatever it is, I think you need to push yourself out of the risk spectrum here and chase those returns because you only get this shot once every few years, right?

32:43You don't get it all the time. And I missed it. Don't fuck it up. Don't fuck it up. Yeah, I love the don't fuck it up in your thing. And we're fully adopting it and pushing it. Don't fuck it up is the new mantra of this cycle, I think, because I was late to things in 2021, and I still did okay. But this is the first time I'm here right at the beginning of it. RAOUL PAL, This is your game, right? You grew up in high yield and distressed. The game in high yield and distress is buy it when nobody else wants it, be the provider of liquidity of last resort, and then ride the fucking cycle. Because that's when you get the gains, right?

33:22The cycle works exactly the same way. As soon as people start getting bullish, it flows into US treasuries, and then people start going out the risk curve. Eventually, the stuff that you all bought that was illiquid mess ends up going up 10x. It's that. RAOUL PAL, It's literally that. We've been the liquidity providers. We've had that part of the stage. We've been the buy when everyone else wants to sell part of the stage. Now we're in the ride the cycle part of the stage. I think it's a funny one because people always tell me, it's like, well, you were advocating so hard to buy the blood, but now that everyone's bullish, you're not advocating to take profits.

33:59And yes, if you've made good returns, sure, take your profits, but never underestimate how powerful these cycles can be. RAOUL PAL And your time horizon matters, right? RAOUL PAL Time horizon matters. RAOUL PAL Do not short-term trade a rampant crypto bull market. You will massively underperform, which is the don't fuck it up, just buy and hold. that worst case, just do that. And worry about it when it's up at new all-time highs and beyond, and everybody's counting 1 ,000, 2 ,000 every time Bitcoin goes up, worry about it then. But now, no. RAOUL PAL I think that's it. I think my sell targets would be to sell something like 10%, so not even like just a small percentage of it when we hit all-time highs, like when we're back to 5K on Ethereum, we're back to 69K on Bitcoin.

34:45Between now and then, I don't want to sell anything. And even then, I only want to sell 10 % because my view is that we'll go materially higher, we'll go much, much, much higher, and then we'll have a new cycle, and then we'll go even higher in the next cycle, and so forth. So it's like where we're sitting here right now with like, prices still where they were five or six years ago, before you've had all these changes in crypto, it's just madness. It's total, total madness. And I think it's, I honestly really, really believe it's an unbelievable opportunity. I don't want people to go out there and gamble their life savings because you certainly have put in what you can afford to lose.

35:20RAOUL PAL Yeah, just don't use leverage. I mean, just don't use leverage. RAOUL PAL Yeah, I did mention that earlier, but don't use it. RAOUL PAL You're a professional trader, right? You just generally don't use leverage because an 80-vol asset with leverage is a route to the poorhouse if you don't know what you're doing. RAOUL PAL Exactly. RAOUL PAL Options are all right, but they tend to get very expensive anyway. RAOUL PAL Yeah, absolutely. But sometimes, you've just got to recognize these paradigm shifts. And when you're in one, even if you don't know you're in one, if you think there's a good probability, you've just got to take some risk.

35:54You have to go for it. And I remember my first day on the trading floor, a senior trader said to me, if you have conviction in something, you've got to put the risk on. Don't think. Don't dilly-dally over level stuff. Just put the risk on. Have conviction in it and ride it. And I think that's where we are now. I really do. Yeah, and the same. It's that mid-curve thing. Just get out of the mid-curve at this point, right? it's a crypto bull market. That's all you need to know. So final question before we get to audience questions. Anybody watching this, drop some questions anywhere, and we'll try to get to them.

36:25But the question is about, okay, let's assume we're going out to the tail now and looking for diamonds in the dust. This is the same question with NFTs. It's so difficult. Do you build a basket? Do you really focus on something because you like DeFi? Or are you like Mando and you're just talking about Pepe all day. What is it? How the hell do you think about that? I gave up. I started an asset management company instead to give it to hedge funds because it's their job. Exponential asset management is a funder funds that invest in digital asset hedge funds, because they can do that all day because it's so hard.

37:02RAOUL PAL, I think if you're looking at altcoins, let's move away from like Bitcoin ETH and L1s, you have two options really. You either buy stuff where you like what they're building, you like the technology, and you hope it works, or you buy stuff because you're buying it for the intentional economy. That's what the Pepe trade is. I have to admit, Mando has fully convinced me on that too. RAOUL PAL, I think you might be right as well, but it's just not my wheelhouse. He was hitting me up about it. I get it, but I just - RAOUL PAL, I love that he hit you up about it. I'm going to make fun of him for that later.

37:35I think the way that crypto works and what happened with Doge and Shiba and some of this other stuff. It is attention economy stuff. It is still mostly retail traders, but even institutional people that are on Twitter, they understand how this market works. So, you have to just identify things that have the right DNA where they can capture some attention. I think that is why sometimes people get lost and like, oh, this coin is amazing because it solves this issue and this tech is brilliant. But again, do you want to be in the tail curves on the mid-curve. Like, what do you - I mean, somebody put that thing on Twitter this morning.

38:09Did you see there was like something about ZK roll-ups with snark and blah, blah, blah. And the crypto, the actual crypto person is, it's got a dog in it. Yeah, exactly. Tech does not win. It doesn't win. It doesn't win. And I think getting attention and virality does, not too dissimilar to NFTs and trying to identify those things. And one of the reasons we liked and looked at Pepe was because of that. But a lot of these meme coins, when you look at the numbers, the volumes die down very quickly. They go to zero. With that one, it's doing, I mean, yesterday, they did$400 million in volume. It's consistently been top 20 coins, almost, volume-wise, every single day for the last two months.

38:53And that's just the spot. If you look at perps, it's top three or four. So those volumes are crazy. I've never seen anything do that insane amount of volumes. And it has all the DNA of like, this is a good meme. This is potentially the strongest internet meme of all time. And it naturally has a community around it. And naturally it's crypto native. All these kinds of things. Narratives just, they just make sense. And you can't explain this to any normal person or traffic person. Well, where's the value and all this stuff? But I think that's overthinking it. I really do. And that's something that I like is like, okay, maybe we're wrong and it's extremely high risk.

39:27But if we are in this big cycle, and you do have a big altcoin rally, and you do have a big potential economy rally, that's a surefire, not surefire bet, but it's as good a bet as anything else out there. And the way that we like to trade is we just pick something that we're convicted on and just go big on it and be very concentrated. And that's what we've done there. RAOUL PAL So when the REC fund? I bet you're thinking about it. Yeah, so we visited it about a year or so ago. And then we decided not to because it wasn't a good entry point for the market. And then we decided, well, we'll just trade with our own money because you don't have to answer to anyone and it's more fun.

40:06But I have to say, looking at all these opportunities now and looking at where things are, it's like, man, if we just raise a fund and put it into some pretty simple trades, you could really return a lot of money to your investors potentially with a good probability and obviously make a lot of money for the fund as well. So I don't know if we'll go down that route or not yet. We have things in so many different pies, but it's always in the back of our minds for sure. RAOUL PAL Yeah, because you can't get that out of your skin, right? Once a trader, always a trader. RAOUL PAL Always, yeah, always.

40:33RAOUL PAL Right, let's go to some questions. Okay, Peter, who's on the Real Vision website, now we've had time to read the XRP case. What do you think this now means for other coins coined as securities by the SEC? It significantly weakens the arguments against those other coins. I think you have to look into the specifics of XRP. So I think they said the institutional sales actually did offend securities laws, but the programmatic sales didn't. So you have to look at the way that other coins did their ICOs or did their sales. And I think potentially some coins that did ICOs maybe still violates SEC laws.

41:07But as a whole, for example, ETH, which was in that bucket earlier, ETH is fine. ETH will be fine as a result of it. So I think it will have a knock on effect to other coins. I think you should see other altcoins that got beaten up because of this bounce back. But the real smart trade, to be honest with you, is to look into the exact language of this ruling and find out which coins it applies to where they're clear and which coins it applies to where they're not clear. And if you want to be really creative, you can put on that spread trade or whatever. But I think that's what you should be doing.

41:41RAOUL PAL, MD, PhD. OK, next question. Jorge or George on the Real Vision website. GM, great fan. For those of us who are well-positioned already, please some thoughts on how to exit so that we don't eat another. So we don't eat another? My third bear market. So my view on this is I don't think you should exit. And I've gone through the maths of exiting versus not exiting. And I always find exiting is actually suboptimal. but people don't like it i'm so used to the drawdown i don't care um but what do you think about exits we talked a bit about scaling out yeah my view on exits is there should be more to do with your personal life and personal goals and ambitions in terms of the money than whether you think it's going to go up or down if you're like i want to buy a house when you make that money to reach that goal you should sell it even if you think it's going to go high you should sell it because you're achieving that goal if you try kids that you want to put through school whatever it is money can't be the goal.

42:35Life is the goal itself. Life is the goal, yeah. And that's how I'm thinking about it. I'm like, well, maybe one day my wife and I will have kids, we want to buy a house. When I get to that stage, that's why I'll want to take profits on. And so I've set myself price targets in my head where I'll sell 10%, here's where I'll sell 20%. And then once you set yourself those targets, you have to stick to them, you have to stick to the plan. When it gets to your sell target, you can't just be like, oh, I think it's going higher, I'm not going to sell now. That's not the reason why you set it. You set it to avoid because you wanted that money out.

43:09I think that's the way you have to start thinking about, like figure out how much money you want to make or take out to achieve whatever in real life goals you want to achieve and then back solve for what percentage you need to sell at each level. Then the main thing is write it down a piece of paper and stick to the plan. Don't deviate from it, no matter what happens. RAOUL PAL Yeah, I think that's right. If your goal, the cost of your goal is less than the total capital you've got in the space, you can ride the rest because you've essentially taken profits. What you've done is banked it into lifestyle, and you can go again without the fear of the hard thing is thinking you're about to buy a new house, and then suddenly you can't afford to.

43:48Because what you've done is crushed your image of your future self that you promised yourself. That's really hard to deal with. the P &L going up and down, is it much easier than that thing? Yeah, yeah, absolutely. I think that's the right way to do it. Okay. Timothy, who's on the RV website. Ovi, I love the skateboards in the corner. Are the skateboards part of an NFT project? So one of them is a skateboard I bought when I lived in NYC, which is not. But the other one that's slightly more colored is actually I bought a piece of art from an artist called Alien Queen. It is a one-on-one unique piece of art.

44:25And for all her collectors, she actually printed the artwork on a skateboard deck and then sent it to us. So the colored one there is exactly that. RAOUL PAL, There is actually a few skaters in the space because Fuck Render, who both you and I know, Ian Rogers, another skater, there is a whole bunch of them, right? It is a weird subculture within NFTs. BARRY HRYBRIEK Yeah, I think that is not coincidence. I think NFTs are kind of counterculture. of skateboarding has been for a long time. And I think it brings together similar people, I would say. RAOUL PAL, Okay, next question. Paul on the Real Vision website.

44:59I think Ovi should tokenize his hair for the RV community.

45:06Yeah, you're getting like Farouk, right? Just because you've all got the same names doesn't mean you have to have the same hair. RAOUL PAL It's definitely getting a bit long. I think it's been almost a year since I've cut it now. So yeah, I'm well on my way to - RAOUL PAL He sounds like a Bollywood star. It's hilarious.

45:24Bijan, who works for Real Vision, runs our community on the Real Vision website. Recently been hearing about ERC-6551 and AI-PFPs or AI-PEPs. Curious to hear your thoughts. He asked for my thoughts. I have no idea, but you might know. BISHAN BOOTHER Yeah, I think I can't remember if it's 6551 or a different standard, but But it's pretty interesting. There's things that will come into Ethereum standards that will allow you to have subscriptions on chain. It will allow for NFT to be owned by other NFTs. And it will allow for, I think, different level of dynamicness that kind of exists in NFTs right now, but not to a level or a standard where people are amazed or wowed by it.

46:03But all this stuff is the future. Again, it goes back to the question, what is the difference between buying a painting and buying an NFT? and you want to make that NFT have features and standards and functionality that is not possible to replicate in a painting. And I think some of these standards will achieve that. So first, I've had AI PFPs. So I'm curious to, after this, read a bit more about what that exactly is. But I've seen a lot of the 6551 stuff, and I think it's going to be interesting. And it will change the way that consumers also interact with NFTs as well in a way that's a bit more understanding and user-friendly than what we're used to.

46:43Okay. Gary on the Real Vision website, any views on Galaxy, Galaxy Digital? I just lump them all together and say that probably if the market goes up, they go up, but no real comment whether Nova has built a good business or not. Yeah. I've not thought, I mean, this is now going to be like what, like post-bankruptcy proceedings kind of thing, and you're going to have to look to figure out the recovery value of everything and um look at it from like a distressed mindset um on that note i would say like it's very hard unless you're like in the weeds it's very hard to get the right information as to where it could go and where it could recover because people will have access to private information that you will won't have access to so yeah like i i would lump it within everything but i think as as we see the fallout of this and 3ac and celsius and all these things like the ftx all of them will have different recoveries and they'll be based on numbers that most of us don't have access to.

47:35And so it's very hard to judge whether to buy or sell, if that makes sense, without having all the information. And I say this having worked on Distress Desk. I think we're talking about a different stock because Galaxy's Novo's investment bank, that's not gotten bust, does it? You know what? I was thinking of Digital Galaxy Group. Oh, Digital, yeah, DCG. I was like, what? Novo's gone bust? Oh, my God. Oh, I was thinking of DCG. Go on. Everyone, this poor old Gary is having a heart attack.

48:08I don't have a strong view on Galaxy Digital.

48:16Is he breaking news here? Yeah, apologies for the mix up. Okay. Okay. Ralph on the RV website, do you know if Damien Hirst is planning to offer any more NFTs? I don't know, actually. I know he's business manager and stuff like that. Have you come across any of that group, any of the Henny group or any of those guys? It's not that I'm aware of. You had great expectations, which was a follow-up to currency. He also is a good businessman, and he wouldn't be active in this market. I think he's smart. He probably realizes, he probably knows this is not the right time to come in and sell art. But I'd be surprised if he came back in a stronger market to sell stuff.

49:01I wouldn't be surprised. Did you buy the currency? We did. Yeah, we did have some. We actually ended up selling them all, but we did originally buy them. Yeah, I kept mine. It was just a really interesting idea of getting a physical, because it really, it's him proving that digital art is worth the same as physical art. RAOUL PAL, Yeah, yeah, yeah. RAOUL PAL, It's just a really interesting experiment. I think it will stand the test of time. RAOUL PAL, Yeah. RAOUL PAL, Because there's Damien Hirst experimenting and proving for the first time that these things are of equivalence of value, depending who owns them.

49:39RAOUL PAL, Okay, running into the last one. Simon on YouTube, what's the chance of an Ethereum spot ETF in the US? RAOUL PAL I personally think it's quite high. I think you'll need some SEC clarity. But once everyone does Bitcoin, and it goes really well, people will say, well, I want to do ETH. It's just the natural progression. RAOUL PAL FRIEDER Fidelity have shown that way. They start with all the Bitcoin offerings. Now they've got ETH. Everybody wants to get ETH done. RAOUL PAL Yeah, exactly. I don't know. RAOUL PAL You know why they want to do ETH? RAOUL PAL Why? RAOUL PAL It's because it's the same as what they do with ETFs.

50:16They take the stock borrow, In this case, they'll keep the yield. They'll give you spot returns of ETH and they'll keep the yield. It's so lucrative for them. Yes. Yeah, that's genius. So I guess the answer is pretty high. I don't know what happens to happen from a regulatory and legal standpoint, but if ETH is in the clear securities-wise, I think people will try. I think people try because it's lucrative businesses for all of them. Yeah, exactly. Zindagi on YouTube, greetings from Cambodia. This is why I love this shit, right? Everybody's heavy. That's fantastic. Any thoughts on Sol moving forwards?

50:57I think everyone knows my view on Sol. What's your view? Yeah, I like it. I think it's proven that it's not going to die. I think the reason why people don't want to touch other L1s is because they think this network will no longer be used. Solana has been around for a while now, and they have people actively working on it. I think it will do pretty well. And that's one where if you're looking for, I think if you're looking for more juice outside of ETH or outside of Bitcoin, whatever it is, that has it. What's that down from more time? How is that? 80 % or something like that probably.

51:28I love ETH, but I'm not an ETH maxi. There's room in the world for more than one L1 chain. And I think each cycle, you'll get another thing that joins the group of things that will always exist and perform. I don't own any Solana at all. I've definitely thought about it a lot, but personally, I think it will fall into that category. RAOUL PAL, really interesting to see Tully talking about just theoretically, could it be a layer two to ETH? Could you use ETH as the security layer? I'm like, that's interesting because everything becomes interoperable if you have a couple of one or two mega chains, which is the security level, and everything goes on top.

52:13RAOUL PAL, Yeah, that's an interesting thought. I hadn't thought about that before. I do think the future is this omni-chain future where the user doesn't really know what chain it's on and everything that strikes with each other, which is probably constructed for anything that is still around in five years. But yeah, it's an interesting thought, actually. I've never thought of that as a debate it just out on Twitter to see. And I'm just like, that's fascinating. Because if we want to have this omni-chain world, do you need all of the security levels in every chain? Because then you can be faster.

52:48It's the layer two idea, but use ETH as the base layer. I'm like, that's interesting. Okay. Castillero on YouTube. Okay, this is one for you as well. How do you see Web3 gaming could be huge in the next cycle um imx and matic seem the obvious winners or it's not matic anymore it's now pole or something isn't it oh the obvious winners how are you thinking through gaming because you've you've mentioned it before yeah i mean gaming is just you have to have to think gaming web 3 is going to be so huge like it's so such a massive like esports and online games such a massive sector outside of web 3 and the reason why they haven't jumped into web 3 is because the game makers and the operators are making so much money they have no reason to, right?

53:32But eventually, this is something that's like having this idea of interoperable currencies that underpin the games and the native currencies, it's so much of a benefit for game players. Eventually, someone is going to make a game that's a lot better than Axie Infinity, like a good Web3 game that will go viral. Maybe it's Yuga Labs with the other side. Maybe it's something that's building on IMX-O-Matic, but some will do it. It'll go viral and people will realize like, oh shit, I can play this game and make real money from it and be able to change this into ETH or whatever it is and have a real play to earn a component to it that is on a good game.

54:11We just need that game to come. We haven't seen that game. The issue with all of these is I think of these as economies. And if you're not careful, you just get capital flight. You need to get FDI into the economy. And how do you drive the two-way flow of capital in and out of the borders. That's the thing that needs to be solved that I've not yet seen fully solved in crypto closed economies. I guess, I don't know, is the FDI that the Web2 native people realize they have to make the switch because someone's nailed it with a really good game? Maybe that's what it is, and that's not what we're seeing.

54:51RAOUL PAL, Well, maybe you have to have a certain amount of stake, like you need to go to the casino. So you need to buy to enter the world, or at least stake it. RAOUL PAL, Yeah. RAOUL PAL, It has to be something that creates a two-way demand for this stuff. Because if not, the gamers are always like Axie Infinity, always incentivized to just take the money out and pay for their food in the Philippines. Because it was the Filipino driven, and it was a way of making money in dollars. But then it just becomes difficult. RAOUL PAL, OK, we're just coming into the last few minutes here.

55:29This is BB on YouTube, not selling the majors at all-time highs has been a strategy that's worked for both prior cycles. Would you apply the same framework to meme coins like Pepe? RAOUL PAL, That's a pretty good question. I mean, something like Pepe has only been around for a few months, so it's hard to compare against all-time highs. I think what you probably want to do is apply some kind of a ratio to ETH or Bitcoin or some kind of a beta and then see how that ratio changes as ETH or Bitcoin goes a lot higher. For me, in my head, it's like, well, I'm not looking at Pepe or any other meme coin and thinking we're going to get to the auto hung and sell 10%.

56:07But I'm like, when Bitcoin gets here, when ETH gets here, how has that relationship versus the majors changed? And if Bitcoin dominance is still 52 % and the altcoins haven't really moved and Bitcoin's at all-time highs, then I'm like, well, I probably want to keep these altcoins. If it's dropped to 40 % or 35 % and the altcoins have outperformed, then that feels like a better time to sell. So I think you want to, when you're applying that strategy, I think you want to be looking at ratios to majors rather than the absolute levels on altcoins. RAOUL PAL, I mean, I got to that with the whole of the investing world.

56:40I kind of looked at everything. and what drives it and how it drives it, and then break it all down to, okay, what's going to drive the most returns for the view? And I can't find anything that beats crypto, right? So technology, yes, and we've seen it this year, but crypto has done double that. And so I've just kind of my base investment is, will it be ETH or not? It's as simple as that. I kind of think Solana might, just because I like the chart and I can see it's the third branded chain, right? Because they're all in the business of selling blockchains, and they've got a brand. Most people don't have a brand yet.

57:16I can see that, but I just think of that. Same with my NFTs. It's all about, can I beat the one asset allocation of truth for me, which is just ETH? It's not because I'm an ETH Max or anything else. It's the best vehicle to express the view. RAOUL PAL, Yeah, absolutely. I completely agree. That's a perfect natural benchmark, I think. RAOUL PAL, Okay, final question. RAOUL PAL, Okay, Varys on YouTube. When do you see the next correction in the S &P and crypto this year? And I know, Raoul, you don't want to trade crypto, but if you wanted to trade ETH for the next six months, how would you do it?

57:53RAOUL PAL, So the next correction, I'm assuming that means a correction downwards. RAOUL PAL, I think that there are still a few risks out there. You have the FOMC at the end of this month. And for whatever reason, Powell seems to want to be very hawkish the whole time. And those FOMC meetings we get every month, their potential risks. I think the other big risk right now is like, it's been smooth sailing for inflation because the annual comps are very easy. Like when you're comparing 9 % versus inflation last year to today, it's easy to beat that. So as we go into the next six months with a very strong labor market in the US, the comps start to get a bit more challenging.

58:33And the question is, can we keep dropping below 3 % or where do we bottom out and do we start rising or do we stay stable there? I think you will find that information out in the next six months. In the next six months, that number is very, very important amidst still a very, very strong labor market amidst still what appears to be a hawkish Fed. That is a scenario where I think it could create a correction. I do not think it changes things in over 18 months, but that is a possible scenario where you see some correction in the next few months? RAOUL PAL I'm going to go with the opposite, which is the first rate cut, it's when you get a big fucking sell off.

59:08I remember this from trading Eurodollar futures. It's the anticipation of the easing of, that's why everything's going up. It's the anticipation of stimulus to help the business cycle develop and bottom out and start moving forwards. The amount of times it got caught out by the rumor, sell the fact. Before you know it, you wear 100 basis point pullback in euro dollars, which is huge for no reason, but everybody's over their ski tips long betting on it. My guess is if there's a bigger, broader correction, it's because we've all bought into the same narrative and there's no buyers left at that particular moment.

59:46As opposed to bad news, it's probably good news that does it. RAOUL PAL Yeah, that makes sense. I guess if they're cutting, by the time they get to rate cuts, maybe we're not in a stronger place economically as well. So housing market could finally break or whatever it is. So there's those things as well that might time. RAOUL PAL Yeah, I mean, I think that all of that commercial real estate has to end up on the balance sheet of the Fed and probably all the world's central banks, because there's no answer. Nobody's ever going back to the office again. So there's no answer to that stuff. So as soon as the leases come up, it's going to get dumped back on the banks, and the whole banking system goes under unless the Fed takes it.

1:00:22Yeah, yeah, yeah, I agree. Perfect. Listen, Evie, fantastic, really great, wide ranging, fun conversation and appreciate you dropping by. Yeah, thanks a lot for having me. Always a pleasure and hope you and everyone listening has a great weekend. Yep. And hopefully I'll see you in person somewhere soon in the world. Yeah, sure we will. All right. Take care. Cheers. Bye. What's up, revolutionaries? Thanks for tuning in. For more content like this, head over to realvision.com and get unfiltered access to the very best, brightest, and biggest names in finance.