Macro analyst and Real Vision CEO Raoul Pal says practically no one in the crypto space understands the true value proposition of Bitcoin and the altcoin market at large.
The former Goldman Sachs hedge fund manager says the size of the opportunity is so large, it is virtually guaranteed that Bitcoin will not be the only cryptocurrency that survives in the long run.
“Almost no one in crypto understands the size of financial markets. It is never ever going to be winner takes all. It is near impossible as each blockchain has its limitations and trade offs and that suits the complexity of the financial world…
The future is a super network of blockchains with the most pristine being Bitcoin and the risk curve moves out from there. Any other outcome accruing to one winner is nothing but false hopes and dreams… This is why I care about the entire DA space. There will be many enormous winners, many failures, many scams, many false dawns but in the end, trillions and trillions of value will accrue across digital assets, tokens, protocols and crypto that tie all of this together.”
Pal says he believes Bitcoin is the best form of collateral in the world and points to trillions of dollars flowing through foreign exchange markets and settlement layers each year as an example of the industry that crypto assets are set to disrupt.
“A few things to make you think… If Bitcoin is the digital pristine collateral, the size of global gov bond market is $123 trillion. Pretty amazing opportunity for bitcoin.
The size of the global custody system is $23 trillion. That will accrue to Bitcoin and more likely maybe ETH.
The settlements layer is over $4 QUADRILLION per annum. Probably BTC and ETH and other blockchains, including private ones. The derivatives layer is another $1.2 QUADRILLION. Feels more like ETH than BTC as the dominant player.
Total equities traded per annum globally is around $70 trillion. Tokens are more likely ETH and other protocols. Total size of FX market transactions per annum is $1.7 QUADRILLION. BTC, ETH, XRP, etc.
Total global debt market is $260 trillion. Non-gov debt is likely ETH. This doesn’t include total lending market which would double this… And then we can tokenize assets from real estate to intellectual property rights, from gaming skins to fixed assets, from securities to income streams. That is probably ETH.
Then we can add in global supply chains and other commercial networks… another few hundred trillion This is ETH, EOS and others.
And then we can add in trade finance, credit cards, stock lending and borrowing, repo markets for bonds, etc.”
Pal says he wouldn’t be surprised to see Ethereum surpass Bitcoin’s market cap in the long run given the use cases of the leading smart contract network.
“My hunch is BTC is a perfect collateral layer but ETH might be bigger in market cap terms in 10 years for the reasons above. Money and collateral is just the base layer. Everything builds on top. The store of value is collateral, the trust layer and exchange of value is bigger.”
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