September 2025: Raoul Pal The Journey Man's Monthly Recap

0:00Hey, everyone. As you know, on this podcast, I bring the best guests in the world at that nexus of understanding of macro crypto crypto in the exponential age of technology. If you're enjoying the show, a quick five-star rating goes a long way. It helps us grow and keep these conversations coming with the best guests in the world. Thanks a lot. Join me, Raoul Pal, as I go on a journey of discovery through the macro, crypto, and exponential age landscapes. In The Journeyman, I talk to the smartest people in the world so we can all become smarter together.

0:37I have very little time or patience for people who only write negative articles. What I don't get about Peter Schiff is he seems like a very smart guy, and I've never met him before. But the world is not black and white. There's room for gold ownership and Bitcoin ownership. it and so like and by the way there's room for tokenized gold ownership bitcoin ownership physical gold ownership if you want to have ownership yeah like it doesn't make a difference like it's not as if you have to put all of your assets in one class and by the way you shouldn't be putting all of your sort of like assets in one bucket but um like i think that i think that people sometimes dig their heels in and it's hard to undo um uh people's perspectives like when i i'll never forget when i took time into web 3 right um a lot of people called me up and were like what the heck is wrong with you right uh when the article came out you know in yahoo back in i think it was like march of 2021 and when the article came out that we made as much money as we made you know a lot of people changed their mind and we're like, oh, my God, this is a real business that you can actually launch.

1:49At the same time, it wasn't until we did Artists for Peace and we started to use crypto to start to show that it can be used for good efforts, that people started to really change their tone. And, you know, like one of the things that I feel has always changed people's perspective is when you could show that the crypto community is actually providing good to the world and is not just a financial tool or an efficiency play. And that's hard because it really is an efficiency play and a financial tool. And so like I try to apply it wherever I can, which includes like my initiatives with New York Cares.

2:28And you're going to see a big one come out, you know, in a few weeks for a stand with students where I, you know, with everything that's going on in New York, I went to a bunch of these New York based companies and I said to them, I said, look, like I sit on the board of New York Cares, the largest volunteer network, you know, in the city. I oversee and chair Stan with students, which I've done for the past five years, which helps the title one schools. Right. And what I'd really love to do is, is I love to show that the crypto community cares about people other than themselves and the community and crypto technologies.

3:07So I'd love for you to participate in this. Right. And, you know, like the overwhelming response has been incredible. You know, everyone from the Solana Foundation to Ripple to Dapper Labs to Exodus to, you know, Broadlight to Falcon X. And I can continue to name on and on and on have stepped up and said, we want to participate and have donated. And Cake Wallet was another great one where it's like people you wouldn't even expect, but are building a business in New York are saying, we want to stand up to help this New York environment when there's a little chaos. And we know that New York is trying to do good for the crypto ecosystem too.

3:47I think that helps people wrap their head around crypto and starts to nullify this. I don't know. The FT will say, crypto bros try and bribe the city by, you know, that's just a very frustrating thing. And again, as you say, once social consensus is fully behind something, the opportunity has actually been captured already. Yeah, look, I will say this is, it's really hard for me to feel like I'm comfortable being called a bro. Like we, there was an article in Decrypt the other day referring to crypto on ramps is sexy. And I was like, this is fantastic. Like I'm sexy now. Like I'm very rarely sexy.

4:27I'm very rarely a bro. I just want to build. Right. Like I like this. Right. At the end of the day, the world is just getting faster, more efficient, cheaper. Like we're seeing that AI is accelerating things, ML is accelerating things. And guess what? The only technology that can keep up with those accelerations are blockchain technologies. Right. And so it's all the same sort of trend line that's taking place. And I'm just having fun building with it. And I think you are too. So what is your crypto journey? How did you end up in the ridiculously difficult idea of trying to build a mobile phone for Web3 network?

5:00Yeah, I was not actually super deep in crypto at the start of this. I was at Google before I was here. And before that, I did a consulting gig where I was building primarily mobile apps for a lot of the big Fortune 500 companies, right? Like in the mid-teens, there was this moment of realization where every big company realized, oh, our mobile strategy is terrible. We have terrible apps. Nobody wants to use them, terrible mobile websites. And so I really kind of built a love for the mobile space first. How can we build great apps that people want to use no matter where they are? And then as I entered Google, really was primarily focused on AI.

5:37So it was this concept of there's an emerging technology that's maybe not quite ready for mass adoption yet, but what can we do with it? And so that love of mobility and that love of cutting edge tech that maybe is still trying to find its way to mainstream led me to this opportunity with Solana Mobile. And so I had a colleague who had been at Google for a time and he made he made the intro. Who pitched you the idea of, hey, come to a Web3 network, which you probably didn't know of, that had gone through the wars and said, oh, look, I've got a really good job for you, Emmett. Why don't you come and build a mobile, help build a mobile for this?

6:15I want to hear that pitch. Yeah. So the way it started was the person who I knew at Google who was running payments at Solana Labs at the time, he said, hey, you get emerging tech, you get mobile. the team is doing something that's totally crazy, totally ambitious, hear them out. And I was a little skeptical. I did know Solana. I did know crypto. And, you know, I held like I had a portfolio, but I really wasn't like actively using apps and trading all the time. But I said, sure, I'll take the call. Like I trust you. And so I met with a few of the early team members. There was basically one full-time hire, this guy, Steven, who was effectively the founding engineer who was hired by Anatoly to kind of get this off the ground.

6:56And then there were a few other Solana Labs folks who were supporting. They weren't full-time mobile people. They were kind of doing other Solana stuff. And I just picked their brains. I wanted to learn more about what they were doing and why. And they each gave their own sort of earnest version of the pitch. But to be totally honest with you, I'm not sure everybody really knew what we were doing and why back then. So there was no concise version of the pitch. I was mostly reading the opportunity space. The one thing they were all super clear on was like, hey, crypto is going somewhere and it can't get there without being successful on mobile.

7:27Like they all totally had that vision down. Um, and they were just really smart. I could see that there was a big opportunity space and doing something from zero to one, uh, including building a phone seemed like too good of an opportunity pass up. And I'm very grateful. I took the opportunity. So now you've been working on it for a while. What's the vision? What are you trying to do? long-term we want to build a new type of mobile platform if you look at what's been built so far by apple and by google it's a kind of known model right they they build a bunch of software and some tools and they say hey developers hey users why don't you guys come together we'll introduce you we're going to take 30 of the action and we're going to set the rules of engagement but we'll get to build a whole bunch of hardware in the apple's case or in google's case we'll build some hardware, but we'll also license the hardware to some other people or the software to some other people.

8:24And it's been primarily in service of other revenue for them, other services revenue, other hardware revenue. For us, we don't see a world that crypto fits neatly into that model. The idea of giving up 30 % of peer-to-peer transactions or no middleman transactions, it just doesn't work. A lot of the tooling that's been built to support really seamless, really easy web two transactions like apple pay or google pay there's not really a web three equivalent of those technologies because they're not incentivized to do it really no they're not incentivized to do it it's it doesn't work with their business models they wouldn't want to start eating their own opportunities and so really what we're out to do is build a new type of platform one that's open one that's crypto native crypto first but actually services mobile users and so our path to that has been through building our own phones which sucks it's like very expensive and very hard, but it's been great.

9:16We've got the opportunity to learn a lot. We get to connect directly with customers. But long-term, we think of ourselves very much as a platform provider. And so we'll always sell our own phones, but we want to bring this to as many phones as possible, not just the ones that have our brand on the back. And so if we were to look forward five years, what does that ecosystem look like? What is the phone at that point? What is it? Because we don't even know what phones are going to be in the future because of AI anyway. I mean, there's a lot changing, but what's in your head? Is this the marketplace for Solana?

9:48Is this the marketplace for Web3 and the tooling for the overall ecosystem? Where do you think we are in five years? Yeah, we're Solana first. We think Solana Mobile, well, we think Solana is going to be the place where mobile is successful. It's fast, it's cheap, it scales. These are all things that really matter in the mobile context. So I inevitably think this will be like the nexus of Solana activity. You know, in five years, I can't imagine a startup launching on Solana and not having an associated application available on our platform. I think as users move more and more towards mobile and their expectations grow higher and higher, you know, historically it's been build a desktop app first.

10:31That's where traders sit all day and maybe eventually we'll build a mobile version of the thing that kind of works i think that'll be totally flipped in five years it probably creates network effects by having your own platform 100 yeah and and we get to we're starting to see more competition right like in the early days we really had to muscle it we had to like chase the teams down who were part of the ecosystem and say hey guys we're doing this thing it's really important here's the vision like please believe in it and build something with us and now that's kind of reversed where we have a lot of teams who say oh our competitors are in there oh we're a trading platform, like we can't be the last trading platform.

11:06We have to be the first one and we have to offer better features. And so a lot of the benefits of building a platform that you don't really start to see until you reach that little critical mass of flywheel adoption, we're like just now crossing into with 150 ,000 seekers being shipped out. That's enough of an addressable market to get most of the ecosystem teams who see the opportunity in and building with us. Yeah, that's actually, it's actually very clever because what it coalesces attention into one place because if not it's the internet and so then there's all the other thing you know all the other apps and everything else but if you coalesce attention to one place and in a delightful piece of hardware that has a good ux experience then suddenly it creates network effects and as you said what at 150 if you're trying to get 150 000 users that's what 10 of the daily active users five percent of the daily active users and that's a big enough bootstrapping of a network to create network effects.

12:02Totally. Yeah, it's absolutely enough. And not only is it a reasonable enough audience, it's a growing audience and it's a high spend audience. One of the things we saw when we launched our first device, Saga, was the initial adoption was really light, right? We didn't sell as many devices as we were hoping to. And eventually our fortunes changed, the market shifted and people saw an opportunity to buy the phone. But the one thing we did see was the people who bought the phone used it constantly. They were constantly trading. They were constantly buying things, selling. And so that activity story of this is where the whales of Solana are going to land.

12:37This is where some of the growing user base is going to be is really compelling for builders. And so if they get some consistent technologies to make the experience super delightful for their users, they don't have to worry about the hard stuff. They don't have to worry about the wallet infrastructure and trying to make it work great on a mobile device and overcoming some of the built-in restrictions that phones have. they can just build a great app and give users a great secure signing experience. We're pretty confident that they'll just continue to innovate and try new stuff. And we're already seeing that.

13:07So I think it'll continue to be a focal point for the growing Solana ecosystem and potentially additional ecosystems in the future. The secret to being a great investor is seeing the world six months ahead. The macro investing tool at Real Vision helps you understand the macro seasons and allocate your assets accordingly. it's like having a crystal ball pure alpha from myself and julian battell you can try it out by signing up for real vision real vision alpha for 30 days the links below let's start with the global liquidity picture at top level where we are from your framework where we are from your understanding and then we'll deal in digging some of the regional stuff because there's lots of interesting things going on i read your note this morning about japan i think that's interesting as well.

13:54So at top level, where are we in the liquidity cycle? What are you seeing? Well, the answer is we're late. It's not inflecting downwards yet. We're still in an upswing. But, you know, we've got to remember here that the liquidity cycle is, what, 34 months old. That's pretty mature as things go. We've got to be thinking of what could be the end game. There's no, I don't think there's anything on the horizon that could necessarily disrupt things. But, you know there are clearly problems building and i think you know as we look into 2026 and probably beyond i mean there are factors to think about and to my mind i mean the two biggest factors i mean number one is that there's a lot of debt that's got to be refinanced out there because debt was effectively termed out during the covid crisis large amounts when interest rates were zero and that's coming back into markets to be refinanced really from sort of later this year but through 26, 27.

14:54And the other thing we must remember is that strong economies don't always have strong financial markets. And the fact is that you've got US tech companies currently investing, what is it, a billion dollars a day in IT and infrastructure. And over the course of a year or so, a couple of years, that's going to take about a trillion dollars out of markets, out of money markets. I mean, these are big amounts. So these companies may be seeing decent profits growth, But the cash flows are really plunging. And that's got to be a problem for financial markets in particular. So let's dig in a little bit to the to the slowness of this cycle versus others from from our work is like normally the liquidity cycle peaks around the business cycle peak.

15:38You know, they're all, you know, related and the business cycle has been super low. If you look at the ISM, it's been below 50. And the strongest correlation to that is rates have been too high for too long. And that has kept the ISM lower than expected, which means it feels like it's elongated the liquidity cycle. So that's one factor that I'm looking at. The other one is the fact that they've been shoving everything into the bills market and not refining, you know, in let's say the five-year sector that's kept this, you know, cyclicality. And I don't know if that structure is changing things because it requires ongoing liquidity as opposed to cyclical liquidity.

16:18So firstly, the business cycle and interest rates and then, you know, whether the structure of where they've been issuing makes a difference? Yeah, well, I think the I mean, the first thing is we don't seem to have a business cycle. And if you look at almost any economy since the COVID crisis, everything's kind of flatlined. So there's no obvious business cycle around. And, you know, we can conjecture as to why that may be. Is it because fiscal policy is dominant? Whatever. But the fact is that there's none. There is a liquidity cycle and that seems to be paramount. And the interesting point is, which I'm sure you'll attest, is that financial markets are responded not to the real economy.

16:55They're responded to the liquidity cycle. That's what's going on. So we need to understand this, like it or not. I mean, it's become the paramount issue in markets as far as we can see. So I think that's true. And I think your point about bill issuance is really critical. And, you know, the way that we've sort of, I suppose, explained this before is to say what you're getting is a transition crudely from Fed QE to Treasury QE. And the Treasury are basically coming in and issuing all the bills. They're starving the market of long dated coupons. So there's not the liquidity absorption that you would expect.

17:33People are being forced into the short end. Two things really come from that. I mean, one is that there is lower volatility in markets as a result. And in fact, we know the Treasury is very keen to actually keep volatility down, given the way they've upped these buyback programs. So that's significant. And if you get a lot of bill issuance and short dated note issuance, the banks buy it with alacrity because this is the sort of security the banks like that matches deposit growth. And if the banks are doing that, they're effectively monetizing the deficit. So I think that's the route to a trend increase in liquidity over the medium term.

18:12We know governments basically have to find ways to fund themselves. And what better through this mechanism? And do you think that this stops them issuing at the longer end? Or is it just a delayed process until they can get rates lower? And we'll come into that in a little bit. But is this a structural change that's going to ongoing? and because it's bills that that feels like ongoing stimulus and it might change this whole cycle? Well, I think the answer is that it continues until it doesn't. And the fact is, we know that these things always end badly because they tend to end in inflation. And that's the experience we've had in the 1970s.

18:51So it's going to go on as long as it does. And then it will be forced to stop, presumably, by concerns over an inflation pickup. Now, I think everything they're doing is trying to bury that inflation news by whatever means, fair means or foul. So we're never too sure what the inflation rate is. And I'm always, you know, instructed by the fact that, you know, one's personal inflation rate is always way, way above what you read in the CPI. So there's obviously a lot of manipulation going on in any way. But the fact is you've got inflating asset markets, which is really testing for testing for the fact that you've got strong monetary inflation.

19:25And monetary inflation is not just a cycle, as we know, it's a trend. And that trend is accelerating. And I think what the world doesn't realize is that things have changed dramatically since covid. We're a world of monetary inflation, monetary debasement. It's not, as I keep stressing, it's not one of financial repression. It's one actually more. It's worse than that. It's actually monetary inflation. And you've got to start thinking about how to invest in the monetary inflation world. Yeah. And, you know, and both of our hypothesis is, you know, long duration assets tend to do very well in that environment.

19:59And we've seen that with technology stocks and crypto. You know, gold has acted very well in this environment, as it should do. And, you know, all the signs are there that the debasement is ongoing and it's not going to go away. One of the things that is interesting to me is obviously Trump and Besant are focused on what they can do with the Federal Reserve. You know, the shenanigans around changing the governor and various board members. Clearly, they want to see if they can force interest rates lower. I think personally, interest rates are too high versus GDP or whatever your kind of real interest rate measure you look at.

20:40And there's room for rates to come down to under basis points, which allows them to refinance again. Any thoughts on on the kind of Fed board shenanigans? Yeah, I mean, I'm cynical enough not to think it really matters too much. I mean, at the end of the day, I don't think the Federal Reserve really controls interest rates, certainly across the curve. I mean, it's rather the other way around. Long term rates tend to drive the Fed rather than vice versa. so you know ultimately you've got to say well okay what's the what's the fair value for the long-term bond and that has to be related to nominal gdp growth ultimately so you're talking of something like about five percent and then you take what is a normal spread between the short end and the long end what is it you know 125 basis points so that gives you your benchmark for fed funds so there's not much they can do sort of either side of that and they can dance on the head of a pin and come out with their, you know, their projections.

21:34But in reality, the FOMC doesn't have that much sway, I don't think. It's really a signaling tool more than anything else, as far as I can see. What matters more is really the balance sheet, what they're doing there. Yeah, I mean, although the other side of this is we're all kind of expecting yield curve control in some way, shape or form at some point, just because of the debt refinancing mechanism. And one of the things that's interesting is, and I only read about this this morning, that there is some changes in the Federal Reserve Act that may allow them not to pay interest on bank reserves, which would force it into the bond market.

22:12That feels like, you know, a backhanded way of yield curve control by forcing banks to go further out the curve. Does that factor in at all? Yeah, it could be. I mean, I think there's a lot of it, you know, all these things that they're lining up, you know, whether it be, you know, elimination of the SLR, the Supplementary Liquidity Ratio, you know, whether it's changing stress test rules, all these things are really trying to get the banks, give the banks more capacity to buy government debt. And we know ultimately this is, you know, this is what tends to happen in a monetary inflation. Banks tend to come in and buy government bonds, then monetize the deficit.

22:47And that's the route. That's the route to funding. The question is, how quickly are we going to get there or how quickly we get there and inflation really becomes the issue? I think they can probably push inflation down over the longer term. And I think there's a lot of factors in there in the equation, as you will know, things like AI, which are probably going to depress consumer prices. But at the end of the day, what makes all this very confusing in a way is that high street inflation is very different from monetary inflation. and you can have a background of strong monetary inflation, but because you get, you know, cost deflation, otherwise productivity wins or cheap Chinese goods, the high streets are less affected for some time.

23:27And ultimately, investors have got to invest around monetary inflation, the debasement of the currency, much more than what they're seeing in the high street. But it will come through in the high street at some stage. Yeah, and it usually comes up as the business cycle picks up as well, if it does pick up, which I think it does. The other thing that's been interesting to me is the shift in how the Fed and the Treasury have kind of managed the debasement. It started simply with the balance sheet. Then everyone kind of figured out that game. And then it turned into this Fed net liquidity game. And now it's gone to what we look as total liquidity, which is including the private sector, because they're now using the banks as their main mechanism of debt monetization.

24:10Does that make sense to you? Makes complete sense. Yeah, well, I mean, let's talk about market psychology. I think every cycle is different but the same, and it just feels like the scar tissue from the last cycle, which we all felt, is manifesting in a lot of the commentary that's coming through at the moment. Yeah, I agree. Now, it's a four-year cycle. This is when it has to end, therefore it will. Last cycle, it was like to the moon forever because no one's keeping an eye on or no one really, well, there were people such as yourself who were really getting a good handle on it. And it was really in early 2020.

24:47No, even I failed in the last cycle because I thought there was another leg to go. Yeah, yeah. So then everyone's sort of, I guess, truncated this cycle. And for good reason. It's not without, you know, there are frameworks out there that are credible that should say that, you know, this is a time when things start to get, you know, peakish. But we haven't had the typical business cycle. And not many people do that business cycle analysis that you and Julian do. So that framework that underpins everything at Real Vision and GMI is sorely missed elsewhere. But it just feels that it's a mechanical response to the market that this is now when we should be peaking.

25:34And it's been interesting to see the commentary flying on Twitter and everyone else. And even within our membership here about is the top in. So yeah, I'm always fascinated by market psychology and how it manifests in the market. I also think what's quite interesting is that everyone is very attuned to the liquidity cycle aspect now. And how that is going to change the outcomes in the future as much as we think that we've still got more to go. And all those things are sort of, they're the unknowns, but the framework that we have here is very, I think, very clear that we have got more to go. We've talked about my Bitcoin cycle risk framework and the topping indicators that I've been building.

26:22I mean, they're not screaming at me euphoria. There is definitely, definitely, and I highlighted this in that last report, Raoul, trend exhaustion signals. the bitcoin chart and fundamental deterioration as well but i think that's a function more of the transition into higher beta crypto through eth primarily the falling of bitcoin dominance which is typical of this point in the cycle anyway right yes yeah and and that transition really started you know second quarter but it was very clear by sort of july when i was on paternity leave that transition had occurred because I looked at the on-chain data on Bitcoin, the ETF flows between Bitcoin and Ethereum, and obviously the price action.

27:14And it very much lines up with that transition period in the crypto market from Bitcoin dominance to high quality alts, not a dash for trash sort of market that we saw in 2021 when people were getting stimulus checks, but a high quality alt season run at the moment. So that's kind of where I'm at. And when we talk about the high quality alt season, I want to see where your head's at. My head's at is quality layer ones, revenue generating projects, and a few big things that capture attention, whatever they may be, that don't come with revenues or anything else, but they capture attention. We're seeing, you know, Hyperlicab is obviously one of them, maybe Athena is another, we're seeing obviously sui solana what are you how are you thinking this next phase is and what are the types of tokens that participate yeah i like the way that you've just distilled that down into a very clear sort of representation of what really matters cash flows you know are these are there protocols that are fundamentally strong meaning that they have cash flows they They have usage, they deliver utility, and have very strong tokenomics.