Raoul Pal: RV Collective Season 3 and Crypto Summer

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0:53ral uh what an interesting moment for the real vision collective season three to go live uh let's just talk a little bit about where we are in this pretty extraordinary news cycle price cycle. Big picture, Ralph, 50 ,000 foot overview. What do you think about where we are right now? We're in this beautiful phase of transition from crypto spring to crypto summer. And if we think of crypto spring, each season is roughly a year. So crypto spring, as I spoke a lot about last year, was 2023. And it was a great spring. It was a warm, happy, friendly place with things like Solana up 10x and Bitcoin up 160%.

1:37But as you transition into summer, things get even better. And what we've seen is explosive moves where just this month alone, many of the larger projects are up between 40 % and 50 % already. And a lot of this is driven by the ETF flows. So the ETF flows have started adding more liquidity into the crypto markets, particularly into Bitcoin, which spills elsewhere as people start to speculate on the ETF. And then that drives more capital in the space that gets recycled. But it's a very reflexive process. And reflexivity is something that was made famous by George Soros. It's this idea that momentum feeds on itself until it doesn't.

2:25And here we've got this incredible momentum. So if you think about it, some of the world's largest asset managers went out to their clients and pre-sold the Bitcoin ETF because they wanted it to be a success. So they've gone around to all their clients and said, look, you should really do this trade. So those orders come in as soon as the ETF is launched. And then there's people who they've spoken to that haven't done anything about it. Because of the original orders, number go up. So number go up drives the next group of people to say, oh, look, this is performing well. I need to buy some. So that group of RAAs invest capital, number go up.

3:00And that drives another group who want to invest because number go up. And that drives the number go up again. So you've got this reflexive cycle of buying, which is why the numbers are so massive in the ETF. And that's coinciding with obviously the Bitcoin halving and this crypto spring cycle and crypto summer. Crypto summer, what's really interesting about it is it's also the time for altcoins. As the spring thaws and summer comes, altcoins come into full bloom. And you start to see some really big moves. If we go back to other periods of crypto. We've seen stuff like Doge in the past do 10x in a week.

3:43I mean, bananas stuff. I call it the banana zone. And really, the rest of this year should be much of the banana zone. It should be one of those things where you shake your head going, I can't believe what's just happened. And then just when you're getting overly confident, there'll be one or two 30 % corrections happen in two days. Like, what the shit? What's going on here? and the idea is as ever don't fuck this up don't use leverage and don't do stupid stuff and just be prepared for the volatile volatility as it happens and if you do get these corrections particularly in the first half of 2024 feel free to add after that you need to set it and forget it so hopefully most people have set and forget their core positions now if you haven't still not too late.

4:31Yes, Bitcoin's right near the all-time high, but many of the others aren't yet. And we've got a long way to go. It's a long journey to come. And crypto summer will be all of 2024 before we go into crypto autumn in 2025, and then wherever the eventual top will be. So we should be expecting that. The other feature of crypto summer is slightly later in the summer, we will start to get NFT season. So we start to see NFTs basing, things like crypto punks are starting to move higher. Some of the art is starting to move higher. But overall, that comes a little bit later. Once alt season starts going, people, and let's say ETH starts hitting all-time highs, people start recycling profits into NFTs as either a way of flexing or a way of holding long-term assets, much like you would in the crypto, in the traditional theater economy.

5:24You know, when you've made some money, you end up buying a house or a nice car or a nice watch or nice art. Well, the only assets we've really got in crypto land are NFTs. So we'll find that people will store wealth and flex in NFT. So all of this is to come. So it's a really nice moment in time where people can start to see what's about to happen. But as I said, obviously, volatility is always around the corner. Well, Raoul, all extremely well said and a perfect segue into what we're about to talk about next. But first, let me just point out the obvious here, maybe belabor the obvious. The conversations that we're having right now are something that we have all the time on Real Vision Pro Crypto.

6:05You and I and Jamie Coots and many others on our platform where we talk about these issues. But I want to cue you up here, Raoul, to talk a little bit about real vision collective season three which you're much more involved with than i am talk about it what is it why does it matter so we've had three well four nft seasons actually the genesis uh group they got given theirs with the pro crypto subscription and they formed the genesis of our web3 community we then broaden the community by thinking you know what we want to celebrate this community is made up of many communities. People hold different NFTs, parts of different groups, whether it's rec guys, world of women, MFers, crypto dick butts, all of these great projects which have great culture around them.

6:52We wanted to bring them together. So we started mashing together this incredible artwork and minting NFTs for that. And that was your entrance into the Real Vision Collective. And for those, you got various amounts of utility. I mean, really significant utility. Some of those come with five years subscription to Real Vision. I mean, crazy stuff. So I'm in this super undervalued right now, but the community is vibrant. There's like, I don't know, 6 ,000 or so members, very active in Discord, huge numbers growing rapidly. Season two was more of the same. That came with the everything code option, which was this option embedded that if he hit 3 ,000 by December, somebody would have won the lottery ticket of the upside of the call option.

7:41Unfortunately, it didn't quite make it, but exploded two months later. So we missed that by two months, but it was a bit of fun to be playing that game. Season three completes the journey. So if you're a season three holder, you get massive utility, including like special t-shirts that go along with the NFTs, but also there's giveaways. But you also get a one-year plus membership or 699 credit added to your Real Vision account if you're already a plus member or higher. You get unlocked content from different tiers. You can gift a six-month membership to anybody you want, which is a really nice thing to do.

8:21If you've got a friend, you think they want help, you think they want understanding, you can gift them that. There's crypto workshops, there's all sorts of things, discounts in the world of Real Vision. But really what you're doing there is you're getting accreditation to get into the Visionary Club, which is our highest tier of our Web3 membership, which will launch in Q2. And that will be a much tighter community, be very exclusive for people who qualified on the points that they've earned by undertaking certain things within our Web3 community. And that becomes an elite community, which I'll be part of as well, where we're chatting, we'll have our own private areas, token-gated content, you know, and that's where we can share ideas, share deals, you know, all sorts of stuff.

9:09So I'm very excited about that too. So there's a lot going on. The Mint itself, the artwork's fantastic as ever. Again, it's a mashup of all sorts of famous different art from different projects. The idea is to celebrate the space overall. As I said, we are going to go into NFT season coming probably in the next couple of months to three months. And then things get slightly crazy there too. And the whole community will continue to come alive and grow. So look, anybody's interested in season three and becoming a holder of that, or maybe all three seasons, which is what you should do, because then you get into the visionary club, go to realvision.com forward slash collective.

9:55So that's the pitch. It's a lot of fun. It's an amazing community. It's not very expensive. It's 0.25 ETH, considering there's literally, I don't know,$600 plus$700 of utility, maybe more, maybe$1 ,000 if you add it all together. So it's a lot of utility, but not that much in price. We're going to take a quick break and be right back with more of the day's top analysis on the Real Vision daily briefing. Join over 5 ,000 attendees for the largest AI event in Asia at Super AI Singapore, June 5th and 6th, 2024. Raoul Pal, Benedict Evans, Balaji Srinivasan, Edward Snowden, and over 150 others will join the industry's most influential to explore and unveil the next wave of transformative AI technologies.

10:45Singapore will become a vibrant AI hub for a week from June 3rd through June 9th with over 150 side events that will make for unparalleled networking opportunities. Visit www.realvision.com forward slash super AI for 20 % off tickets with the code realvision or click below. Have you ever wanted to trade Bitcoin but haven't dared try? With Plus500 Futures, you can trade crypto without the hassle of opening a wallet. With just a few clicks, you can register and start practicing with their free and unlimited demo. See a trading opportunity? You'll be able to trade it in just two clicks. Feel ready?

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12:11Obviously, this is an emerging world. I think that everyone is just beginning to figure out in terms of what things like membership, community, and other sort of connection and human interaction look like in the Web3 world. I'm sure people have a lot of questions. I'll give people an opportunity to put their hand up and ask you those questions, Raoul, in just one second here. But before we do that, Raoul, what else do we need to talk about? we just i mean as ever i'm in fact you can't see me but i'm wearing the t-shirt that says don't this up is again i just want to say to people the crypto market has offered us the biggest macro opportunity anybody has ever been given in history it is the fastest growing asset class of all time with the highest returns generated of any asset class in history.

13:06It is a crazy, volatile, wild space. But step back. What we're being given is the opportunity to own a share of this new internet. We didn't get that with the old internet. We didn't get that with mobile phone networks. We didn't get that with anything. This is a public utility goods, these blockchains and we get to have a share of them okay that's amazing so i think the space right now is a two trillion dollar space i think by the end of this cycle it's probably closer to ten trillion dollars maybe it doesn't get there maybe it's five trillion but i say let's say 10 is in the right ballpark it's on its way to 100 trillion to 200 trillion that's the size of all the other asset classes.

13:56You will never be given opportunities like this. And that's why it's so important not to fuck this up. We've complained all the time about how expensive real estate is, how expensive the equity markets are, how difficult it is for people. Here for once is a fractionalized asset that anybody can put 10 % of their paycheck in, whether you're in a rice field in the Philippines or in New York City living on Park Avenue. Anybody can do this. It is the first globally homogenous investment product. It is the same in Nigeria as it is in Buenos Aires, as it is in London, as it is in Dubai. We've never had this.

14:41Yes, gold is a global homogenous product, but its access is not as easy as simply connecting a wallet and buying a fraction of it. So the opportunity set is so big that all you have to do is buy some of the larger projects that are more likely to win, those that have shown the Lindy effect, i.e. they've been tested, battle tested, and they win. Right now, there's really three clear leaders in that space, which is Bitcoin, ETH, and Solana. Maybe there are others coming through from last season. Avalanche, for example. Who knows? Yet to be seen. XRP, been going a long time. There's several of these out there.

15:26But really, just try and own the top three with 90 % of your bag, maybe 80 % if you're an utter degen. If you are that filthiest of degens and you want to keep 20 % to speculate in the 100Xs, do so. But also remember, when you're on Twitter and you're seeing all of the people you follow in crypto, let's say it's 300 people, and each one of those 300 people manages to find one great idea where they make a 5X, a 10X, a 50X, a 100X, or they get the airdrop or whatever they do. What you see in your, and maybe all of the other trades that they do aren't great, But you see 300 people all celebrating trades and you're thinking, why isn't it me?

16:16Well, there was a one in 300 chance of people who really know what they're doing. So it's unlikely to be you or me. So I try really hard not to screw it up. And that's where also the value of community comes in. The reason Real Vision is so powerful is that the community itself is in 120-odd countries. They are really, really interesting, smart, engaged people. I just came back from Switzerland and met members in Zurich and Geneva. We had a Real Vision meet-up drinks in Geneva. I'll be having one in Dubai. We've got one in Singapore. It's a lot of fun. But the community always impresses me. And that community is what this Real Vision Collective is celebrating.

17:09It gets you in. It's your access pass to this Real Vision Web 3 community, where literally some of the smartest people in the world, some of these Anons are some of the leaders in incredible businesses across Silicon Valley, in finance companies. It always surprises me who these people are. So listen, don't fuck this up and surround yourself by the best people. At Real Vision, we talk about this thing, which is we try and turn information, which is everywhere. It's like water. It's free. But we want to turn it into knowledge. And when you turn it into knowledge and you apply some learning and some tools, you can turn it into wisdom.

17:53And really, that's what we do. We give you knowledge and the tools like AI, charting, analytics, research, all of this stuff, and then the network. And the network is the superpower. It's the multiplier. And Real Vision, without question, has the best network of any community I've ever seen. ralph speaking of community i know there are folks who want to get some questions in here we're going to take those in just a second you have a question for ralph how please raise your hand we'll get you the microphone we'll bring you up on stage so that you can ask that uh but while folks are doing that while they're queuing up ralph i've got one more question for you i'm going to ask you to put on your future gazer spectacles here and give us a sense as you talk through a little bit about what some of the promises, what do you think this space is going to look like?

18:48You know, maybe in five, six years, we're having this conversation on X spaces or whatever the newest technology is, maybe a decentralized technology in 2030. What might the world look like? What might some of the opportunities be? What might some of the risks be? What are some of the problems that need to be solved? In your view, what might this world look like in five years? So by 2030, we will have digital identity and we'll be using that to verify who we are and who is the AI. Hopefully, it'll be the start of our identity, which has zero knowledge proofs hiding who we are. So we can be whatever we want to be online, but we verify who we are.

19:34That will start getting integrated into the big web two world. Okay, so that's one thing. Real world assets, more of them will be on chain. And I know this is a hot topic right now, but nobody's really seeing it. I was in Switzerland and I sat down with one of the investors in XPAM, my asset management company, and she is a trader for one of the largest commodity trading firms in the world, a physical agricultural commodities trader. Obviously, she's invested in XPAM, so she knows about digital assets. Are you guys doing anything in commodities with letters of credit and stuff like that? She's like, oh, we've been doing it since 2021.

20:17I've not heard it at all in any interview on Twitter or anywhere that, I don't know, 10 of the largest commodity trading houses in the world are using blockchain to settle, to track transactions, letters of credit, and the whole process. So it's happening. We're seeing it in shipping. We're seeing it in all sorts of places. So real world assets will see tokenization of many, many more things to come. The other thing by 2030, we'll be used to the idea of central bank digital currencies. The euro probably would have rolled out by then. Switzerland will have rolled out. Singapore will have rolled out.

20:59India will have rolled out. Maybe the UK will have the wholesale CBDC. Maybe they'll have the retail CBDC. So we'll be using blockchain technology just for our everyday transactions. Okay, that's pretty interesting too. We'll see the continued rise of stable coins, the access to the US dollar for the masses. Before, it was held only within banks. So if you were in a country like Nigeria, to get dollars was very difficult. Now, everybody has access to the dollar. So we're likely to see that. By 2030, we'll certainly see much more of gaming on blockchain rails. Blockchain rails allows the ownership of assets in gaming world.

21:45If we think of the size of the Roblox economy, it's huge. But if you leave, you lose your assets. But crypto will change that. So that becomes very interesting as well. We will see, I think, the market cap of the space well beyond 10 trillion on its way to 20 or 30 trillion in 2030. It's kind of 2031, 2032 is when things will really start accelerating in that cycle. So we should expect a lot. We will start to see exchanges built on top of blockchain rails. And And as you mentioned before, we will certainly see media built on blockchain rails. So blockchain is one of the underlying protocols of the internet.

22:36And adoption happens slowly then all at once. And I see a lot of that to come. So a very different world, but in the direction that we can understand. There'll be some other stuff we had no idea was going to happen. You know, what do we use NFT technology for? What else can we do with this? We don't know yet, but we'll start to see it in the next few years. We're going to take another quick break and be right back with more of the day's top analysis on the Real Vision Daily Briefing.

23:10Ralph, one thing we do know is we've got questions coming in right now. I'd love to get them to you. By the way, if folks are having any challenges with the X spaces getting up on the stage, sometimes that happens here, just please go over to YouTube. You can get us our questions there. Looks like they're coming in. And I wanted to ask you, this one comes to us first from John K. This is actually a really interesting question about the role of ETF and flow of funds. A row with so much money coming in through ETF, does less of it spill into smaller alts, NFTs, etc. Like last cycle? And then he adds, keep up the great work in developing the Real Vision website.

23:47Obviously, Real Vision 2.0 AI and all the charting functionality probably was referring to there, Ralph. it certainly spills through liquidity begets liquidity new money coming in gets recycled so people go further out the risk curve if you start to make a lot of money in in bitcoin then you start thinking i wonder if i can make more money in xyz and so money gets recycled it's very typical in all financial markets so money in one way creates opportunities elsewhere so yes i firmly believe that altcoin season is going to be a wild one because we've got a lot of capital coming into the space. So in many ways, Raoul, what you're suggesting there is exactly perhaps the opposite of that thesis, that the idea that if there's a flow of funds in on the ETF side, that that actually begets greater liquidity into alt's NFTs and some of the other areas that are further out on the risk curve.

24:45Yeah, that's right. I mean, we will see that flow through for sure. okay next question comes to us from guy e uh there seems to be a growing consensus of a left translated cycle i know ral has expressed his 20 60 20 thesis but i'm wondering if the etf flows are giving more credibility to the left cycle idea or if macro is still king in his thinking and ral i'd ask you to explain a little bit about what the 20 60 20 thesis is for folks who mean so So look, none of us know the future. So we're trying to probabilistically weight it based on the evidence that's currently at hand. So the evidence currently at hand using the everything code, which those of you who are Real Vision members, and if you're not, go to realvision.com.

25:32It's free and there's no reason you're not a member. Go there. The everything code gives you an understanding or it's my framework of understanding of liquidity into the future, which drives markets. and it kind of leads to price predictions and all sorts of wild stuff. But basically, the Everything Code suggests liquidity should continue to rise all the way into 2025. So that will give us a typical crypto cycle. It's usually a four-year cycle, crypto winter, then crypto spring, which was last year. Crypto summer would be this year, and crypto autumn or fall, which will be next year, and then back to winter again.

26:09The issue is, is you don't know what that last year is going to look like. So in 2021, people, including myself, were expecting a final leg higher. Now, it didn't make any difference to me. I wasn't selling anything or doing anything. It was just observationally, I thought it would have another leg higher. If you remember, I bought ETH calls to add to my position, you know, in a kind of low risk way in case it had that blow off top. But it didn't. Everybody was expecting it. Everyone had laser eyes and it failed. okay that scarred a lot of people so that was a slightly shorter stunted cycle versus expectations a normal cycle probably would have seen bitcoin above a hundred thousand a left translated cycle means that all the action happens early and it peaks early it kind of sort of was like that in 2021 because we had that one peak sell off back up to the high kind of failed but this time it might be sharper because of the etf flows and then you kind of run out of buyers but generally you need the macro to have changed for that to happen and as far as i can tell my forward-looking work suggests that that is unlikely to happen but i'll give it a 20 chance because you never know the other side of the equation is that the etf flows feed on the regular flows and what we end up with is more of a bubble cycle because many narratives all come together from gaming to AI to digital ID to CVDCs and we've kind of, you know, to central banks buying Bitcoin, all of these feed on themselves and create a bubble cycle.

27:562017 would be an example of that. Often in those bubble cycles, 2013, you see a sharp rally, then what looks like it finishes and then it explodes higher again. That's the other fear, is everybody thinks it's a short cycle. They kind of take profits and the market rips. And it keeps going, goes much further than expected. So those are the three outcomes. The two tails have 20%. The normal scenario is a 60 % probability. Not easy to deal with because you can screw the whole thing up. Because if the left translated side is right, and you haven't sold anything and you want to sell something to take some lifestyle chips off the table, then all you'll see is downside prices and it's miserable.

28:46If you do sell out and it rips higher, you're going to feel terrible because it's shot high. I've done that in 2017. So the way to approach it probably is to take some off the table in 2024. So you've got the lifestyle chips accounted for, and then you can run the rest. And then if you have a normal cycle, that's fine. If you have a bubble cycle, you can participate in the end of that. So that's where I think we are. The macro doesn't look like it's changed any of this stuff. The ETF, just part of the flows. Don't forget, when you go through a$2 trillion space, you need to go to 10 trillion, you need a lot more capital coming to the space.

29:25So you need institutions, RAAs and others to drive the space higher can't be just retail. So, you know, the feature of the space just by the need of the capital to grow the space. Well, I know you've got a hard stop coming up at 1.30 p.m. Eastern time, just as we're about to hit, it looks like about 700 concurrent listeners on this conversation. Final thoughts, key takeaways that you'd like to leave folks with. I know we crammed in a lot of information in a short period of time here. Final thoughts, key takeaways. is? Look, I'll reiterate. I know it's a bit of fun when I say don't fuck this up.

30:02But I actually mean it. It's like, guys, you've got the opportunity. This is the one. You can't be angry about the system. You've been given this gift. You can't be railing about the central bank because they're causing this opportunity. So the idea is just not to miss out on this. The biggest macro opportunity of all time in the greatest risk-adjusted reward assets that have ever existed. It's a different order of magnitude to anything else. And we are so lucky to be in the space. We're so lucky to front-run the institutions who are nowhere near. The ETF buying is not institutions. That's a false narrative.