Former Goldman Sachs executive and current Real Vision Group CEO Raoul Pal says that Bitcoin and Ethereum are distinct from the rest of the crypto markets due to two fundamental features.
Pal tells his 574,100 followers he’s looking at both Bitcoin and Ethereum as he believes these two crypto assets will continue to become more valuable over time.
“How to allocate to crypto:
Does the project have provable network effects? Or might it have future network effects? The former suggests higher allocation of risk budget, the latter, less.
BTC and especially ETH have it all. Others – yet uncertain.
ETH is growing exponentially.”
Network effect is a phenomenon where an asset or a service becomes more valuable as more people use it. Pal has previously said that the crypto space is almost purely driven by network effects, causing the industry to explode at an extraordinary rate.
“It’s astonishing, the network effect. And we’re bringing in the institutions, and they’re spreading into Ethereum, and everyone else is building products. It’s coming at us at lightning speed, and I don’t think the space can catch up with the narrative change that is happening so fast.”
Pal also highlights the metrics that he uses to quantify the network effect of a crypto asset.
“Active wallets plus number of applications built on it with their adoption too. ETH is far ahead – BNB and Solana are also showing scale potential.”
The macro analyst remains bullish on the crypto markets at large and believes that the nascent industry will trigger one of the biggest transfers of wealth in history.
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