The Wolf Of All Streets - Raoul Pal Predicts The Biggest Bitcoin & Crypto Boom Yet!

Episode Date: December 22, 2024

Get ready for an unforgettable conversation with Raoul Pal on The Wolf Of All Streets! We dive into the "banana zone," the future of crypto regulation, tokenization, meme coins, and the unprecedented macro opportunities ahead. Join us as we decode market trends, the rise of technologists, and the next big moves in Bitcoin and beyond—don’t miss this alpha-packed episode! Raoul Pal: https://x.com/RaoulGMI ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEKDAY! 👉https://thewolfden.substack.com/   ►► Arch Public Unleash algorithmic trading. Discover how algorithms used by hedge-funds are now accessible to traders looking for unparalleled insights and opportunities!  👉https://archpublic.com/  ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. Use code '10OFF' for a 10% discount. 👉https://tradingalpha.io/?via=scottmelker  Follow Scott Melker: Twitter: https://x.com/scottmelker Web: https://www.thewolfofallstreets.com/ Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #investments  Timecodes: 0:00 Intro 1:54 Liquidity and Market Cycles 4:07 Altcoin Rally Predictions 6:17 Global Liquidity Needs 8:24 Technologists Reshaping Politics 10:09 AI and Crypto Dynamics 12:02 New Political Divides 14:15 Crypto’s Role in Elections 17:27 Lessons from Thatcher’s Policies 19:38 Tokenization in Finance 24:01 Social and Meme Tokens 28:45 X and Tokenized Payments 32:08 Bitcoin Adoption in Corporations 35:47 Greatest Macro Opportunity 42:01 Block Space and Scaling 48:07 Long-Term Wealth Strategies 54:05 Taking Lifestyle Chips The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

Who the fuck are you to say that somebody with a million dollars is more responsible over their money, or is smarter, or is more able, or still wants to lose all of their money? Yeah, people have got to stop thinking about the cycle. The cycle, the cycle, the cycle. It's a bull market for everybody but me. It's what your friend owns, not what you own. If Bitcoin goes from 100,000 to 250,000, we're all like, oh, find me a better asset, this is shit.

It needs a weaker dollar. It needs a weaker dollar. Everybody needs a weaker dollar. What it was, was a coup by the technologists. Big thumbs up. Thank you. Ladies and gentlemen, Raoul Paul. It's official. Crypto markets have entered the banana zone, a term coined by Raoul Paul that we discussed many, many months ago on this very show. I'm not going to waste time with a long-winded intro when you know you're about to get endless alpha from the legend, Raoul Pal. so i think we can make an official public service announcement and that is that we have officially entered the banana zone yeah i think that's pretty clear the much anticipated banana zone i would say actually that our final signal is when justin

sun bought one for 6.2 million dollars and ate. Oh, and Elon was putting bananas on his rockets and in his rockets. I'm like, what the fuck? So, but a lot of people were skeptical still when you made the bold call. Was it spring? When you really kind of said with conviction, hey, halving's coming, liquidity cycle's coming, election's coming, everything aligns, the banana zone will come. I always kind of believed in the four-year cycle for whatever reason,

and figured that we would see this sort of parabolic move in the fall. But it's been interesting how much it's been led by Bitcoin so far. Yeah. I mean, that's always the first phase of it. Don't forget. I mean, if you go back to 2020, it was not until like November that ETH started really performing. It was all Bitcoin dominance. And Bitcoin dominance topped almost at the right moment. Bitcoin took off. Now, we haven't got to, I think my next phraseology is going to be the banana singularity. That's when everything goes bananas. But what we're seeing is this is a tricky market like this because what you're getting is a whack-a-mole,

which is never the thing that you're owning. It's a bull market for everybody but me. It's what your friend owns, not what you own. And then you get like a week in the sun where everything goes up and then it goes off again. So we're not at the banana zone singularity point yet. That will come as well. That's probably sometime Feb, March, when it all gets silly. I thought the banana zone singularity was going to be the merger between an AI super human intelligence and crypto in some way, shape, or form. But I like yours better.

But we really haven't had a true alt season, to your point, right? The alt seasons that people remember from the past, which by the way, are really 2021, 2017, do the math. That means 2025 on the four-year cycle, not 2024. But when you can throw the dart and it goes up, period, right? We've still had this sort of sector by sector or narrative by narrative moves, which we always see in the past. But it's been almost a barbell of memes and Bitcoin and then a few select things in between. Yeah, exactly right. But we did see the first signs of it. All of the, as they were called, Dino coins, all of the longer standing crypto all had face ripping rallies, which was good for them. Then we had the AI ones. And it's been very sporadic, as you say. But overall,

the whole space is moving higher. But it just is all happening in sporadic periods. And then it pauses. And it's been pausing for a bit now, like Solana's done nothing for a while. And then you look back, and it's done another 50%. And it's an interesting market. Normally, what happens at this phase is we should rally into year end pretty strongly in everything. But then the real game gets played in first quarter. Yeah, so let's put this in context of what's happening with broader markets and in the world.

Obviously, we have the Trump presidency incoming. You said a Santa Claus rally. So that's what you're alluding to. We should have a good end of the year. But then maybe some question marks coming into January. I think everybody's bullish on what Trump will do for the market. But, you know, there's some question marks as to what will really happen if he does widespread tariffs, for example.

If we don't hear about crypto in the first 100 or 200 days because there are other priorities, what that can mean for the market. And then, of course, the Department of Government Efficiency, aka Doge, last I checked, if they fire 75% of government employees in the first few months, that might put a slight dent in job numbers. Exactly. Look, there's always something to worry about. But generally speaking, let's look at the last Trump administration. So from September to the end of the year, the dollar rallied. September, the end of the year,

rates went up. Same narrative. It was all about tariffs and, you know and what's he going to do and how's it going to play out. Almost exactly as the year turned, the dollar went lower and rates went lower. So I've been producing a chart showing that global liquidity tightened and it has a 10-week lead time. And that should mean that the end of the year, we get a correction. Now, that would not be surprising. Let's say Bitcoin gets to 120. It corrects back down to 100. I mean, that's just normal course of business. But Twitter being Twitter is losing its mind over this correction.

I get messages, is this the one? I'm like, calm down. You should be expecting at least another four or five of these over the course of the next year. They're just regular. For some reason, people are losing their minds. But once that's out of the way, usually, it should be good. Now, liquidity needs to come back. So we need to see the dollar weaken. We need to see rates come down somewhat. Those are key things for us. I don't see any reason why not. And then there's a bunch of technical stuff, like the draining of the Treasury general

accounts over the period for the budget negotiations and stuff like that. And normally, that's a big injection of liquidity. And the Fed are doing other rinky-dink stuff, like they're going to cut interest rates on the reverse repo, which basically is trying to force money out of money market funds and into the private sector. So everybody wants liquidity. And they're willing to force it by any means necessary. Everything you just described were just ways for them to find more money in corners that we haven't looked into to inject more liquidity into the market. Well, because they've got to roll the debt. And they can't at high levels, because it just means

a compounding of debt. And if Elon is serious about trying to get the payments down, well, debt's the biggest one. It's now bigger than the military. So they've got to do that. The other side of the equation is we all know China's in trouble right now. Its economy is a mess. Bond yields keep falling. And really, why China's in a problem now. Its economy is a mess. Bond yields keep falling. And really why China's in a problem is it can't stimulate without losing its currency. And it doesn't want to do that. So what it needs desperately is the US to inject liquidity so it too can inject liquidity. It needs a weaker dollar.

Everybody needs a weaker dollar. Now, last time Trump got in, one of the first things he said is, we want a weaker dollar. If you think about what they want to do, they want to export US goods. They want a weaker dollar. They just want a weaker dollar. And they're going to have to do that. Is there a path where the dollar flies? Some unexpected way that that happens? Or can they pull whatever lever they want and make this happen?

I'm always impressed by how far they can kick these cans down the road. Yeah, I mean, they want the weaker dollar. The stronger dollar is something nobody wants. But let's say it happens. Well, what is Scott Besant likely to do? He's likely to inject more liquidity. Somehow, some way. Because what they don't want is to, I mean,

this administration above all others seems to be really focused on the midterms. Which makes sense. They've already raised a ton of money. And they're like, if we need to get anything done, we need four years. If not, it's a shit show. Can we have the Senate, the House, everybody for four years? Then we can get stuff done. And that's, I think, what all

of their sort of heavy level advisors are, is like, this is the important thing. So the last thing they want is to fuck up the economy in the meantime. Nobody wants that. They want a nice, strong economy without too much inflation, without, you know, but they want a decent picture. So I think they're going to do anything they can to do that. When we talked about the initial iterations of the banana zone, you know, six, seven months ago, you pointed out, as I said, the liquidity cycle and the election and all these things were yet to happen. But we did not even at that point have bull bull Donald Trump for crypto. So now you have him saying while ringing

the bell at the stock exchange that he views the price of Bitcoin effectively as a marker for the success of his campaign, right, of his presidency. Like, yeah, we knew that the guy looks at the stock market going up and, you know, has dreams about about it, and all he cares about is making people rich. Now he views Bitcoin equally in that bucket. This is beyond even my wildest banana zone expectation. This is not a normal election. This is not a Republican versus Democrat election. It was fought on that, but what it was was a coup by the technologists. They won the entire government, whether it's J.D. Vance, to Vivek, to clearly Elon, to David Sachs, who was in the background doing all of this, to Mark Andresen, to Brian Armstrong. They orchestrated this. It is their coup. So what we put in is not an old Republican administration

of the past. We've put in the technologists who said, we're going to run the show now. And Trump gets the smartest people in the world to do this for him. And he gets to walk away with a good legacy because he can't be voted in again. So this is why he's very compliant with all of these guys as well. I mean, so that is the biggest change I think we have seen in an election cycle for a very long time. It's the kind of complete collapse of the political system as we knew it. And on a more serious note, well, that's a serious note too, but on a serious note, the next election and the elections afterwards are not going to be fought over capital and labor. So all political systems are capital versus labor. And it's the balance of power between the two that defines politics.

Where we're going, there ain't no labor. Well well because of ai and the technology is taking over obviously and so the next election will be fought over it's going to be like the humanist trans humanists it's like pro-tech anti-tech and it's only going to get worse and then there'll be parties trying to give ai rights there's all all sorts. But this capital labor thing, I think that was the last election that it's ever going to be the major thing, because it won't be labor. So yes, there'll be protective versus free market, all sorts of things that we know. But the change in how we think about things is going to be massive. I think it could also be skinned as the oppressor

versus the oppressed. We have this very strange society now where even when horrible things happen to people, CEO of UnitedHealthcare was murdered. And you see there's a whole sector of the population because he was rich or because they view healthcare as predatory that was celebrating this guy's death. But that seems to be kind of more the division that we're going to have moving forward. I guess it's the same capitalists, but money versus no money or power versus no power. It's the same struggle. But it seems like we're at this really interesting tipping point where that could, I'm not going to say explode, but I think where that is largely what's being voted on in a lot of these cases as well. Yeah. I mean, I don't think

the average person has realized what they voted in. Yeah. I mean, I'm very pro-technology because it's the only way of driving up GDP growth and changing everybody's future. But what a world. I mean, the Europeans are doing the exact opposite. They're busy saying, you can't use video AI models. You can't do this. You can't do that. And the US is about to go full acceleration, hit the nuclear button, fuck it, let's do it. I don't know. I just know it's going to be a wild ride. For the next four to eight years, it's going to be crazy wild ride. For the next four to eight years, it's going to be crazy. I hadn't really thought about it in the way that you framed it, that it was sort of a victory by the technologists. Obviously, I didn't really view it as

right, left, cut and dry as it was in the past. But when you think about effectively every person being appointed to a position, they're all either billionaires or technologists in some way. But what I found even more striking, and maybe this is a commentary on where technologists stand when it comes to Bitcoin and crypto, but every one of them in every role, whether it's a financial role or not, is in some way outspokenly pro-crypto or Bitcoin. RAOUL PAL Yeah, because don't forget, the crypto lobby, Brian Armstrong, raised more money than anybody else than a 16z. And Trump knew. I mean, there was a, I think, was it Mark Cuban who was saying this?

I can't remember who it was, but it's like, are you insane? 51% of all males under the age of 30 own cryptocurrency. And you've been beating them with a stick. So what you've got is in another four years' time, they're wealthier, older. And if you're enabling their wealth, they will not forget you. And so Trump has, I think, realized this. But also he had the unlimited money pot from this industry.

And then, you know, when he talked to friends of mine from the crypto industry, they said the real mover and shaker in the background was David Sachs, who is Elon, Peter Thiel's kind of puppet master. And who will now be the AI and crypto czar, which I basically, by the way, find interesting. It's not technology czar. It's very specifically the AI and crypto czar. How do you view that? That they've given it those two specific industries

as their own sort of advisor in the world. Well, they've kind of honed down to what really matters. It's like that battle over capital, which is the crypto market, and the AI. Now, what's interesting here is they're all fighting for decentralization. That's not something you thought you'd see. But it's like decentralized money. And then it's been very clear because of elon is they don't want to centralize the power of ai in closed source technologies so suddenly zuckerberg's back up on top because he's open sourced um llama um and it's hugely fascinating again Again, I think we will look back in several decades time and say this was one of the most important elections that we've ever seen. Well, there's never been a greater

pendulum swing, I don't think, especially from the regulatory perspective. What gets replaced now is this contentious, no merger and acquisition, no entrepreneurial spirit, no crypto government into what seems like, I guess, best case, but seems like will be a free for all. Maybe it won't. Maybe it won't. But it feels like everyone's in place to allow these industries to thrive to any degree possible. I guess you could almost say that crypto now has to prove that it's worth all the things we've been saying. You've got the environment. It's kind of like when you get in power, it's very hard to rule. So maybe crypto has to show its value now. Yeah. Look, I think they're also a pretty sensible bunch. I think they will

keep regulation in the right way. This reminds me somewhat of when I was young, Margaret Thatcher came into power. So she came into power before Reagan. She was the one with the big ideas. The UK had almost gone bankrupt, had to have a bailout from the IMF, where at the turn of the decade, 1979, it was rioting in the streets, race riots, garbage was not being collected. The country was falling apart. There was rioting in the streets, race riots. Garbage was not being collected. The country was falling apart. There was no electricity because there was an oil strike. Everything was happening. She comes into power, fights everybody. Everybody hated her on the left. Everybody on the right loved her, blah, blah, blah. But one of the things she did, which I think is a replay of what's

happening now, we had a system of what were known as council houses in the UK, which were government housing. And after World War II, because so many people had lost their livelihoods and all of this stuff, there was this, for the less well-off, there was this government housing. And it was a very low rent. And what Thatcher did was sell them to those people, to the people renting them, but at a stupidly undervalued price. And she turned millions of less well-off people from being Labour voters and net creditors to debtors and conservative voters. She completely changed the nation for the next 12 years because of doing that. And this is the same kind of thing with crypto, right?

Is if you enable all of these people, they will become free market capitalists. So what do you think the best case scenario is right now for crypto? Is it effectively an unregulated market where nothing is a security anymore and Coinbase lists every meme within five seconds of it launching? Or do you think that it's maybe a happier medium between the reasonable regulation that has prevented fraud in the past and all the problematic things in this industry and beyond, and the ability to still innovate and even operate a company in the United States? Yeah, I think capital formation at the core is very important. And I think they understand it. But there has to be some guidelines around capital formation, or everybody scams everybody.

Right. And we've seen that, right? If you give them a pump dot fund casino, they will scam each other until they will run out of money. So yes, I think we're going to completely overhaul capital formation. And that can be for traditional assets being tokenized. Don't forget, when you speak to people like BlackRock, or Blackstone, even more importantly, they own all this real estate. What they want to do is they want to get individuals to invest in their funds to keep their big funds going. And so they want to tokenize. I heard Steve Schwartzman talking about this. I was at some event speaking, and he was. They all want to tokenize their assets.

On the other side, tokens have been very profitable for VC funds, but also it's a good way to bootstrap a business as well. So yeah, I think crypto is going to go through some changes, but the big change is, A, the finance system has nothing in its way for adopting the technology now. They're not scared of anybody. So we're going to see a lot of innovation being built in finance now. And don't forget Goldman, JP Morgan, they've been working on this for a decade. Goldman's crypto team has been around since 2015, I think. So we're going to see that innovation. The other side is all of the brands, the cultural side of stuff,

from football teams to pop stars to sporting to everything, entertainment industry. It's all coming. Do you think that they're going to be launching NFTs, or do you think they're going to be launching meme coins this time? I think all of these are experimentation with what the it's going to end up being um you know i've got a thesis on the music industry i've had a long time where pop stars and stuff they can have tokenized community taylor swift is the example i give her economy is so big that the

central banks in australia singapore the uk and the US all mentioned the Taylor Swift effect on their economies, right? But she made like $1.4 billion in ticket sales. So therefore, her economy is a lot bigger than that. We're talking about this is a multi-hundred billion dollar economy is what it's worth. So can that be tokenized in certain ways? It's very hard in the music industry because, and you know this because you've been around that industry for a long time, is nobody owns their IP rights or anything. Everyone's got 78 different fingers in each pie. There's one thing that most people could get, and that's their album cover art. Spotify, because of streaming, you've lost all digital value. So how do you get digital value back? Well, NFT is a lost all digital value so how do you get digital value back well nft is a pretty

good digital value because it begins scarcity so imagine if taylor swift had a hundred thousand kind of nfts of the album cover art and they come with rights to tickets at events or merch or earlier stuff right now she suddenly got a stream, which had been gone to zero because of digitization. And she doesn't have to schlep her ass around the world dancing on stage, which is not an easy business. I mean, look at the Stones. They're still fucking touring, and they're 80, because it's the only way to make money in the industry now. I think that there are still countless ways that NFTs could see the value that we saw four or six years ago. And a lot of niche parts of crypto could finally see meaningful adoption this cycle

for ideas that we saw last cycle. That said, I don't know about 10,000 PFP avatar projects. No, but what it's showing you, all that was the experiment where it is, is can you create digital scarcity that has persistent value as an exchangeable, unlike a meme coin, which is a fungible, which is a non-fungible. Okay, that technology got battle tested by crypto to death.

Brilliant. We're just doing it with meme coins now. Meme coins are what I think are going to end up being social tokens or community tokens. And we are battle testing them to death. And we will end up forcing regulation and everything else. It's pretty clever how we do this in crypto. DeFi, we've battle tested it to death. We've blown everything up. We've tested everything. Because there's a bunch of degens who'll do anything to make a bit of money. But what they're doing is essentially being paid to test technology. It's pretty smart. So we saw what the first iterations then were of NFT adoption for music, art, memberships to clubs, everything. How does

a meme token fill that role if you think that that's the way that it's going to come? We've obviously seen a few, Iggy Azalea and others, do this without it being an outright scam. But what's the use case of owning a meme token from the community perspective or the actual utility? Well, let's not call it a meme token and let's call it a Disney token. And everything in Disney World, you can get rewarded with these tokens, and you can spend these tokens. So you've now created, again, I use Disney a lot, because Disney's like $190 billion company, whatever it is. What is the cultural value of Disney? I'd say a trillion dollars. Yeah. And we're not capturing it, because you can't capture intangibles on a balance sheet.

And tokenization does that. So we saw the test of this. This was the Facebook Libra thing, which was like, can we have a 3 and 1 half billion person network and have our own system of money on it? Everyone's like, no, fuck off. We've just done it again with Ton. And again, they's like, no, fuck off. We've just done it again with Ton. And again, they've gone kind of fuck off. Um, but we know it's coming. Uh, and that's the idea of decentralized money almost. Now there's not money, you know, Taylor Swift economy is not money, but it's a token. It's a loyalty point. You know, think of, you know, I use American airlines.

I've got American airlines points. I redeem them all the time. I do stuff. I earn them. But it's a token. It's a loyalty point. You know, think of, you know, I use American Airlines. I've got American Airlines points. I redeem them all the time. I do stuff. I earn them. But they keep inflating. They debase my currency all the time. So we have a way of not debasing currency.

I mean, that's a currency. Starbucks tokens, Starbucks points, they're all currencies. But you can't trade them easily and they debase. So I think this is what we're attesting here is something much larger. Also, the fact that in due course, once the AI overlords have taken over, we're just going to fucking speculate on shit as well. We're just speculators by nature. And we will speculate on attention. The idea that something has attention, it lasts for a while and then goes is super interesting. Because in a world of AI, let's say Scott builds this nice SaaS platform that creates some music

platform for DJs. And I think Scott's thing is brilliant. I want to copy it. I just asked my AI and it copies it in three minutes. So now what is the value of a company, right? It's very difficult. It comes down to attention and you're going to need velocity of capital to be able to deal with attention cycles that can be a day, a month, a year, an hour. And that's what tokenization does really well is because the old VC cycle of this kind of 7 to 10-year cycle, that's not going to happen because everything gets disrupted. You mentioned Libra, obviously, and I'm friendly with Mo Shaikh and the Aptos guys, which was basically the offshoot of Libra.

So at least the early ideas found a home. Yeah, I'm on the SUI foundation on the board of that, which is the other side of that equation. Right. Exactly. And recently, as an aside, David Marcus came out and basically said that Libra was killed by the Fed and Operation Choke 0.2.0. But maybe that's a separate conversation. But it does lead to the question, in a tech-driven administration run by a bunch of technologists, can a Libra launch? Can Elon Musk come up with a stablecoin within Twitter, get quick regulatory approval, and have a full financial system within X outside of the United States. It's called Dogecoin. You know it. I know it.

It is, right? It is. And the reason being, it's really simple. Again, once you step back from all the stupid shit that goes on all day on Twitter and crypto markets and say, OK, Raoul is a content creator. He is on X. He can't get paid because Stripe doesn't work in the cayman islands add that to indian content creators nigerian content creators filipino content creators

right it's a shit show so if he wants to bootstrap a much bigger more powerful network you need a universal system of which you can make payments and Doge is an easy one because it already exists. He's not launching it. He owns a ton of it. And he's already talked about it being the currency of Mars. You need it for a whole bunch of things. So the funniest thing, I mean, he keeps telling you he's going to do it. You don't call the government department Doge.

He's telling you what he's going to do. Now, whether it's in this four years, I think it will be. I think he will shoehorn it in some way. He won't say, and here's my Megaropolis X ink and everything that's using Doge. He'll just introduce it. It'll just slowly integrate, and it will become the de facto currency of X. I think that's true. I want to go back to tokenization. You

talked about how the Blackstones of the world would love for retail to be able to participate. For all of that to happen, we still actually need some fundamental changes in accredited investor laws in the United States. So we have the tokenization side, which would theoretically sort of democratize it and give access, and I could buy $10 worth of this fund. But the laws still exist in the United States where if you're not making a certain floor income or you don't have millions of dollars in assets, you're still not allowed to participate in any of that. So it seems like if the Black Rocks and the Blackstones and the J.P. Morgans, everyone of the world, want tokenization, they're going to have to focus on actually making laws or pushing through laws that

can accommodate every man. For what I hear, and who knows if, I hate the word, my sources, the people I'm speaking to know anything or not, they say they want to rip down the SEC and start again. And at the epicenter of that is these accredited investor laws Right. It is simply a a million dollars these days is not what a million dollars was ten years ago for one thing Right. The other thing is who the fuck are you to say that somebody with a million dollars is more responsible over their money or is Smarter or is more able or still wants to lose all of their money Yeah, and who's to say, therefore, why you can allow any bozo into Vegas and gamble their entire life savings, but it makes no sense.

It does make sense when you realize the financial industry did it on purpose. They did it on purpose, so they have to be the gatekeeper. And we're about to blow apart the gatekeepers. And the financial industry, to your point, is kind of saying, actually, we want those guys now, the retail. But I don't think retail are going to give a shit about some Blackstone version 5.

Me neither. No. They're going to care about some crypto index fund that's created for a meme index. Yeah, I mean, they're not going to come in, honestly, for real estate stuff that does 8% a year. It just doesn't work. I mean, the basement of currency is more than that. Those days are gone. And the financial industry is going to have a wake-up call if it thinks it can sell low-performing products that is for asset gatherers to make their money versus just owning Bitcoin. I was going to say, I think

that if you need a prime example of that and someone who's showing it on the grand stage, you've got Michael Saylor at MicroStrategy, obviously? I mean, he's embarrassing all of them. Yeah. I don't know how you can be a fiduciary at this point and not look at him and shake your head and say, damn it, I need a strategy. Yeah, and he might not want to copy his strategy, but the strategy of having just that on your balance sheet

is a great strategy. But don't forget, it's very difficult for many of these to do it. Michael Saylor had to have some real gumption to do it, because he had to fight a system. So for Microsoft to do it, you've got to fight all of the shareholders. You've got to fight the government.

You've got to fight everybody who doesn't want you to do this. Facebook Libra writ large, if Microsoft said, oh, we're going to stick $50 billion into Bitcoin on our balance sheet, the government's going to tap them on the shoulder and say, no, you're not. Even this government? No. This will be different. Yeah. So that's why it seems like there's this massive unlock coming. So one of the huge stories, obviously, when MicroStrategy started to add Bitcoin to the balance sheet was the GAAP accounting rules that people weren't aware of, right?

You basically had to mark down your Bitcoin purchase to the lowest point at any quarter and destroy your earnings, right? So nobody was going to do that. Those laws were eventually changed last year. But interestingly, I think they just actually went into effect this week. And now we're seeing David Bailey from Bitcoin Magazine tweeting, hundreds of public companies are about to put money into Bitcoin, and saying that he actually knows and is seeing them and is talking to them. Maybe that wave

is actually coming now with those laws quietly coming into effect or going out of effect. Another thing when you zoom out is people are like, yeah, the institutions are coming and corporations are coming and governments are coming. Well, for this asset to get from 2 trillion to 10 trillion, you need a shit ton of money. It kind of has to have adoption by major people at this stage because there's no way retail can drive Bitcoin from 2 trillion trillion to $10 trillion. So it is the adoption wave. We were just lucky because this is the first asset known to humanity where retail were first. They can front run the institutions and the big money. We've managed to

front run all of these fuckers. And you can still do it. And you can still do it. Across the board, including Bitcoin, by the way, in my opinion. That's right. You're still front running everybody. So I don't know if it will happen, but you have the future president of the United States saying that he will make Bitcoin a reserve asset. Non-zero chance. You can still front that, run that by buying Bitcoin. Because if the United States central bank adds Bitcoin to the balance sheet, every central bank on the planet will be forced to do so, whether they like it or not, in my humble opinion.

RAOUL PAL Yeah. But in our bizarro world is, when you look at the crypto Twitter, virtually nobody actually owns Bitcoin. People have some, their savings. But what they actually own is everything else. Because nowadays, if Bitcoin goes from 100,000 to 250,000, we're all like, oh, find me a better asset. This is shit. I'm like, I mean, for normal people, that is the greatest asset of all time. That is not Raoul's opinion, for those of you who are going to clip this and make a viral clip of us saying that Bitcoin is shit. Neither of us believe that. No, no, thank you. We'll clip that out too though, so we're screwed anyways. You're so burnt like me from this.

Well, you and I did a, last time we talked about meme coins, Bitcoin maxis went crazy and we were not even in any way saying, hey, we love meme coins. We were just saying they bring a lot of liquidity to the chains that they're on. Factually. Yeah. And you know what, if you want to to play do it with very small amounts of money because you're going to lose your ass and then what's his name kruger or whatever his name is starts going hey freddy freddy with it i mean what really yeah i mean that that that happens but i'll let you continue but yes that people the speculators certainly and that's why we see all seasons and these cycles in general, they don't just get bored over years that it's not going enough. If it doesn't move for a week,

they go to find greener pastures. I know. It's extraordinary. I mean, what a time to be alive. What a time to be alive. I mean, yes, look, there is an enormous amount of speculative risk-taking. But this is, and I've said this for a very long time now, is the greatest macro opportunity of all time. Yes, you can be ultra safe and just own Bitcoin, and you'll do very well indeed. Or you can try and figure out how to make more money, because really, you've got a tailwind.

Everything goes up. When the music stops, a lot of this stuff goes to zero. But I don't blame people for playing the game. And the game of the biggest mid stuff, because that's a very big game indeed. When Ethereum started, or Solana, or Sui, or whatever it is, these things These things are incredible wealth generating machines. And there's no friction overhead, right? So we've even, so you talked about the dinosaur coins. I mean, XRP pulling five-ish X, right? Cardano had a huge move at the same time. Algorand, HBAR, right? So many of these older coins that a lot of people said,

listen, these things can never go up like this again. There's too many bag holders, too much friction, too many people who are looking to sell on every pump. And there they go. In a matter of weeks, it happens. So imagine what happens with the shiny new things, like the ones that you just mentioned, that hit blue skies and don't have people who are angry

and have been holding the coin for four years and are looking to sell it. People have doubted that this cycle will be the same or that it will happen again. I just- Well, you and I have been around this space long enough to know- I think it's going to be bigger. I think it's going to be bigger. I kind of agree. Unless something blows up global liquidity, something dramatic changes, which is where we started this conversation, I don't see a reason why this is not going to be a 2017 Redux. Yeah.

That's what it feels like. Yeah, let me take this sort of flip side, devil's advocate. Just we have SUI and Aptos and Monad and all the Layer 2s and everything coming online. It's a lot of supply. We still have unlocks from previous cycles that are coming, huge unlocks of other tokens. A, how much retail do we need for everything to go up? I mean, how much interest is there going to have to be to buy all these things, these new pre-sales and VC-backed tokens that are going to all launch

at the same time? I guess that's the first question. And B, how many of them are we going to actually need? How much block space? We used to argue, there's not enough block space for all the things crypto is going to do. Now it's like, what's going to fill all of this space? So there's an interesting structure to markets is there are more VCs and airdrops than there are secondary professional pools of capital in crypto. Call them hedge funds. It's quite funny because everyone's like, those bad VCs, they get tokens early, they dump them. What's happening with Pingu today? Everyone's taking their cash machine and selling it immediately.

It dumped a crap. I didn't really look, but I saw a lot of red. I don't know, but they've all done the same. And I've still got shrapnel of my ape coin and all of the shit that I was like, my MF a coin, you get given this stuff. It's like free money. Isn't it amazing? I've just been given 10 grand. Three days later, it's worth 12. I heard people who held a pudgy penguin at the launch got $85,000 worth of Bangu token. Anyways, it's a lot of money. RAOUL PAL. So anyway, so why there was the big fall is there's not enough secondary buyers because it's retail. The hedge fund industry, which I've

got this asset manager, XPAN, which invests in crypto hedge funds. There's not that many that are of any size. And the total size of that industry, maybe today, is maybe $10 billion. The traditional hedge fund industry, $4 trillion. So what happens is the VCs exit. Think of that as an IPO, early IPO. And there's not enough asset managers to buy it. So prices fall 80%, 70% before they clear. And then these guys do their homework and say, what do they want to own here? Do I want to own Aptos when it comes out and dumps, or Sui when it comes out and dumps, or Monab when it comes out and dumps? Retail could play that game, but they tend not to because the retail are always the IPO buyers. Oh my god, Pengu's out today. I must buy it. Smash. But I think it's just a structure of markets thing. So I don't think we need retail.

I think we need more institutional money into the hedge funds and the professional trading to have professional capital lower the volatility and make the space a little more functional. Because it does seem that there's a lot less interest in the bigger name shiny new things. Like meme coins, shiny new thing is something that's hot for an hour or a day or a week. But the big next layer one that's going to revolutionize crypto, those VCs, to your point, have been in it for years, probably, months or years. And if they're going to sell on those first unlocks, you're going to need a lot of buyers. I mean, generally speaking-

A lot of buyers. The big- But they've gone up, and it hasn't even been a bull market. The big investors like A16Z tend not to sell. That's right. It tends to be the smaller shops who need the liquidity tend to sell. The more kind of crypto-native shops, they tend to be the sellers. But yeah, we are going to need a lot of liquidity to deal with this. And normally, these unlocks really add pressure

on the downside in the down cycle. Right. And that's why these things go down 99%. And then after that, we can figure it out what's a good token. But the other point you made earlier is how much block space we need and what type. We are going to need an astronomical amount of block space if we're going to put the whole internet on this.

But are we going to need infinite number of block space providers? Definitely not. How scalable are the ones that are out there now? Most of them are very scalable. And Ethereum will sort its shit out and it will become extremely scalable as well. And therefore, you kind of think there's not much room for others.

Some will be more niche and some will be like for gaming and some will be for- The gaming chain, the NFT chain, the metaverse chain, if that's a thing. Could be, or it just could accrue to the top five whatever those are and bitcoin being separate because it's not a smart contract um but you know the top five smart contracts and that wall will fight out like it was with computer manufacturers like it was with email providers like it was with i mean it's, it's everything. It's cloud computing. RAOUL PAL, In this case, you can make a lot of money on the ones that die before they

do. Because you have the speculation cycle before you have an adoption cycle. And we all know that in the next six months, it's going to be… SIMON HUGHES, And don't forget, these things never die. Tokens never die. Unlike equity. RAOUL PAL, FTC is trading at like a billion-dollar market cap or something. SIMON HUGHES, Yeah.

You know, you and I know at some point there'll be an enormous rally in Luna because what a fucking meme. The thing that blew up the world last time, you know, at some point we'll be looking around and it's trading at 50 billion bucks. You're like, what the fuck? But because these things don't die.

The tokens never go away, which is another bizarro world. Yeah. It's like you're trading Enron stock right now. Although I heard that they're coming into crypto now. Somebody bought the rights to Enron.com or something. You can make this shit up, right? No, you can't.

I always try and observe what is going to be the thing that we shake our heads up at next cycle in 2026, 27. Yeah. What is it going to be? We know memes. We know that it's stupid shit and most are going to zero. So that's not head shaking. We're already shaking our head at it and laughing. So yeah, I mean, fart coin, you know, we get it. But there's going to be something that we thought was really cool. Like metaverse tokens last time all went to zero. I'll take you a step

further, buying the actual land next to Snoop Dogg's mansion for $2 million in the metaverse. Exactly. So we need to figure out what this is going to be. And we'll be both getting excited about this is really cool. You know, this could be it's the AI agents is one of those where they're kind of pretending that these things are autonomous agents, but they're not. But some dudes just programming it to do stuff because randos launching crypto launching crypto wallets. And they've got some jacked GPT-5 who says, yes, Scott, that's a great idea. And it was like, oh, my God, it's alive. It's alive. So maybe it's that shit. I don't know. You mentioned Fartcoin. I mean, last I checked yesterday, I think it was down about $100 million. But it was almost a $900 million market cap, SparkCoin.

We seeing any signs of excess yet? But genius, right? FartCoin, what a brilliant name. It's so brilliant because it makes everyone, from your kids to your grandmother, laugh. Nothing's funnier than a fart. It really, really angers TradFi. Because it makes everyone from your kids to your grandmother laugh. Nothing's funnier than a fart. It really, really angers TradFi. They're betting on fart coins.

Yeah, it's like the bigger the joke, the dumber it is, the better it will perform. It really angers people. I see it all over X. It's like, oh my God, the Fed needs to raise rates. Look at fart coin. So that gives it unlimited attention. Attention is the game. You know, farts get a. So that gives it unlimited attention. If attention is the game, you know, farts get a lot of attention until they don't.

Maybe Powell will mention it in his next speech. That's right. But as I said, farts get a lot of attention until they don't. Well, it's a passing fad, hopefully. That's right.

Generally. So how do you then, you know, position for the coming months? I think we all agree that odds are we see a mega cycle here and then we see a crash and then we see another peak and then we have a bear market and all the same things happen that couldn't happen because it's different this time. But, you know, how do you position? I guess, you know, we're pretty crypto native. I think we would be more likely to take some speculative bets on things that are maybe smaller that retail wouldn't have.

I still think retail could pretty much buy a couple of the big layer ones and have a great ride. You know, you're an average person. I trade so little. I barely do anything. Yeah. So my entire cycle from the 22 low was switching, putting cash in cash in i didn't sell anything then adding switching eth to solana so yeah and then it's been sold to sweet because it's been outperforming

that's basically all i've done that's all i need to do in two and a half years and yeah i bought a couple of memes of which they're less than 1% of my portfolio because I don't want to feel like the old boomer who's shaking his fist at the sky with anger. And I've got a decent Doge position because I actually think it's quite interesting. And here's the dirty, horrible secret, is Doge has been harder money than Bitcoin since it came out. It's gone up 500% versus Bitcoin since it came out. It's pretty astounding.

Musk helped. Yeah. I mean, look, I'm joking when I say it's all the people. But I joke about my early Doge trading all the time. And like a penny was, there was no chance it was ever going to a penny. We traded it in sats against Bitcoin. There was not even a dollar value attributed to Dogecoin when I traded it in 2016 and 2017. RAOUL PAL And look, people don't get confused.

I'm not saying it's better than Bitcoin. I'm just saying the most humorous thing is happening, which is this stupid token that was a joke has actually held value extraordinarily well, better than 99.9% of all crypto. And it's probably going to go much higher. I know. So that's really all I'm doing. And as I mentioned before, I know you've not been a particular NFT-er, but I have been scraping profits as I go into what I deem to be long-term savings assets, which is- Punk. High-end digital art, punk, that kind of stuff, but also X-copy and Beeple and stuff. Because when people make wealth,

they end up buying art. Yeah. Stories old as the- Right. And those are pieces of art. They're not 10,000 character cartoons. Listen, I've told the story quite a few times, but at the peak of the NFT market last time, I was on some spaces for some reason. They invited me as the NFT skeptic. And Bored Apes had a floor of like multiple hundreds of thousands of dollars. And it was a bunch of...

It was like my face and a bunch of ape avatars. And I said, guys, when the bear market hits, I promise you when Bored Apes drop below $25,000, I will buy one. And got eviscerated because, you know, this was Bieber, peak Bieber and Eminem time and apes were going to a billion dollars. And I bought one when they dropped to 19,

they hit 8.9 ETH at the bottom of this cycle. And ETH was beaten down. And I bought one for like $19,500. And if anybody watching this wants to trash me, go and look for my tweet thread. I think it even became a sub stack of why I paid $400,000 for a Bored Ape. And I bet you make money on that one day. I think I probably will. Because A, the price of

ETH. And because they're priced in ETH, which people don't realize versus meme coins that are priced in dollars. So you get the multiplier. And I think if you go sort this shit out and do stuff with it, which I think they probably will, I'll probably make money. But feel free to laugh at me because I bought kind of near peak ape. You bought cheap ape. But feel free to laugh at me because I bought the kind of- I remember it. Near peak ape. I remember it. You bought cheap ape. But in the end, that is the game we play. Yeah, $10,000 ETH and the floor doubles from 20 to 40 here and you're good.

That's right. And you don't even have a floor ape, if I recall. Yeah. So, yeah, it's as simple as that. I mean, the NFTs that I bought at the beginning of the year, they're probably doubled in ETH terms. And ETH is 2x'd. Yeah.

So I've made four times my money already and I haven't done anything yet. ETH's not even all-time highs. It's interesting. I was at Art Basel with Micah Johnson, who is an artist and has Aku, which is his character. I love Micah. He's a lovely guy. He's amazing. And we were hanging out with his big statue there.

And I said, I'm not on top of the NFT market. I was like, when are you coming back? When are we going to start seeing NFT stuff? He's like, I'm really planning on things. He's like, but my problem was that I really wanted to create value and not just make money. And he's like, so I was building all these things and a business around it. And he's like, but I look, and he mentioned the same two, you said X copy and people. He's like, these guys captured the zeitgeist. Their art has never

really gone down. I can't speak to that. I don't know the value. He's like, people line up for every single release. Uh, you know, they know exactly how they can put one out every single day and make hundreds of thousands of dollars. And so i guess i didn't realize that there was still a corner of this market which was sort of that art side of it that that never died that never died it really did not die just it just changed hands from people who needed liquidity um you know people who needed liquidity gave it to people who had liquidity. That is all that happened at that end of the market.

I focused a lot on that end of the market because it's really interesting. But the same happens with punks. Some punks have been ripping in price. Apes have been going up. Because there is some social signifiers, not to necessarily boast, but just to have been around

and understand that it kind of says you're part of the club, you have a commonality of interest, something that I'm not sure penguins do, but maybe I'm wrong. But they are selling those in Walmart. So I guess there's a different kind of value proposition there, which is that pudgy penguins, the IP, perhaps, you know, accrues value. Well, that's a good experiment we will see, is does IP accrue to the token or to the equity? Yeah, that is going to be very, very interesting. No, we don't really know how that works.

So let's see. So you and I have both largely been on the, we put money in, but don't take so much money out, ride the cycles. If this cycle is as big as we think it could be, do you have an exit plan, at least partially? I don't think anybody here is going to say, sell all your Bitcoin, right? I think we all think it's going to a million dollars eventually. But is there some point here where it gets so nonsensical? Even if you just say, hey, listen, I'm selling to get back

in because I'm so confident that every sign of froth is here and we're going to get a down summer of 75% drawdown on alts. Yeah. I mean, how I'm dealing with this mentally is somewhere in the first quarter, assuming that it's a crazy alt season, I will take a bunch of chips off, call it 20%. And that I will do to sort out stuff that I want to sort out in my life, lifestyle chip stuff. And then you're de-risked. So nothing really matters after that. Then it's like, okay, let's ride the same cycle, see how it goes. And that's going to be, okay, do I take some more off because I want to buy a house in Spain or I want to do XYZ or whatever, right? Fine. Would you put some in stable coins a little bit or put it in traditional markets so you've just got a plan B? Yes, everybody should do that if that's what you want to do. If it then goes to la-la-la land, yeah, you might take some more off. Or you just ride the bloody cycle and forget about

it. I mean, I was at a friend of mine's house for dinner in palo alto um he bought i can't mention his name um he bought bitcoin at three dollars two million two million dollars of it so that's a 66 billion dollar trade now he will have taken money off on routes just to pay for lifestyle chips but whatever he's worth, 5 billion, 10 billion, 20 billion, nobody knows, nobody cares. He didn't trade ever. He didn't go, oh, the cycle, I must sell out at the top and buy the bottom. He took some money off the table.

Let's say you take 10% off and say, well, that'll cover my cost of living each year. You can take 10% off each year. And because the compounding gains of 100% plus, you're going to make a fortune. And living on a yacht. Yeah, people have got to stop thinking about the cycle, the cycle, the cycle, the cycle. I agree with that. But I think that that applies more to Bitcoin than random shit coin you bought on the hype that could literally be zero next time. And I guess, so it doesn't really apply to you because you've basically rotated into things you fundamentally believe in, at least for the time that you believe in. You might rotate that into something you fundamentally believe in more down the road. I might get to the point is I cut.

Well, if you're buying something that's part of this hype cycle, like most of these altcoins are going to draw down 90 something percent at some point. Yeah. And you know, if I were to say at some point, I don't want to spend all this time looking for the outperformer, taking the risk, I would just buy Bitcoin. Yeah, go into Bitcoin. And do nothing. You could probably buy Bitcoin and ETH and do nothing for the rest of your life, and you'll be absolutely fine.

But there's a game to be played, which is we want to create more money for ourselves. We didn't have it at $3 and hold it till this very day and do a massive size bet So, you know for everybody we want to make some money We want to you know as everybody on crypto Twitter says retire your bloodline Yeah, it's like you just tell you your bloodline is going to retire all of your money by the second generation down So yeah, you're not gonna retire your bloodline no matter what you do no i'm going to kids either so it doesn't matter so i can retire myself oh you could you're good to go man you could you could do it uh whatever you want with this money i i think it's a exceptionally valuable exercise to think about it now though

yes and i do urge people and i will be very public about it there was a first tweet stuff that went out about this i'm going to urge people to take some lifestyle chips off and just sort out their finances whether it's paying off your mortgage or your car payments or your student loans or your fabulous holiday with your parents whatever it is do something to de-risk your life because we run obscene amounts of risk in this space and it becomes normalized. But just de-risk your life. Then as the cycle develops,

then you can maybe look for the next lifestyle ratchet. Do I buy a nicer house? You know, that kind of thing. Because lifestyle and experiences is all we have all we got man i say that all the time we got nothing else it's the money without all the money's irrelevant it's the lifestyle that it can accomplish so then you can lock in the next ratchet and then keep going in the trade but don't yeah i your point, remember, most of the space goes down 99% every four years. And the chances are you will get a 99% too, unless you just don't fuck this up.

Yeah. If you can meaningfully change your life with some sort of profit, there's never a question that you should do that regardless of what the asset is. I know we're out of time. Damn it. All right, man. Well, one day I'm going to come sit in that couch back there. It looks so inviting. Those chairs, your bar stools are amazing, by the way, those bar stools back there. Every time I find myself just getting lost in your house, you know, I might steal it and make it my green screen background. Just tell everybody I'm at your house. Amazing. Perfect. Thank you so much always for the perspective. Anything, any quick updates from Real Vision?

Because I've got to imagine things are ramping up with the market there. Yeah, there's a lot going on. Look, anybody who's here, we've built a ton of stuff on the platform. There's all sorts of incredible things like trading leagues with trade ideas. There's some. So this is really interesting. I'm looking at the top of the trading league on Real Vision. It's equities.

I'm like, really? Quantum compute. Some guy nailed three quantum computes. RAOUL PAL, Oh, those things are bigger than meme coin cycle we're having over there. SIMON HUGHES, Yeah, they nailed that. They nailed a bunch of stuff. HBAR is in the top movers right now. It's like, wow.

But it's fascinating to see. But anyway, you've all heard about Real Vision. Come right now. It's like, wow, but it's fascinating to see. But anyway, you've all heard about Real Vision. Come across. It's free. There's a lot of stuff for you there. And we've got our big crypto gathering event in Miami coming up. Oh, I should get you there, Scott. When is that? Last weekend in Miami. Last weekend of January. I was thinking, who's in Florida? I was like, idiot. Yes, I'll send you an invite. So yeah, so that's it. And really for everybody else is have a fantastic Christmas and New Year. Awesome, man. Thank you so much. Always inspiring to talk to you. It gets me really excited for the next cycle. I like your little bubble there. Very cool.

It just randomly does it. Whoever invented that was the most evil person I've ever come across. Wow. We can edit it out or we can just put one on my shoulder too. Big thumbs up. Thank you. Ladies and gentlemen, Raoul Paul. Awesome, man. Thanks so much. Have a great day.

Thank you, mate. Take care. Let's go.