In a striking statement, macroeconomic expert Raoul Pal forecasted a future when the burgeoning “crypto world” not only rivals but potentially surpasses the traditional “fiat world” in economic scale and influence.
Rapid Growth And Migration To The Crypto World: Pal highlighted the rapid growth of the cryptocurrency economy, noting a relentless migration to this new digital realm.
Pal said the crypto world currently boasts 425 million “residents,” with an average annual growth rate of 100%.
This migration is often fueled by issues in the traditional fiat system, such as war or wealth expropriation.
Economic Expansion In The Crypto World: He further said the space was witnessing a massive influx of newcomers, driven by innovation and the rebuilding of leverages on firmer foundations, like regulated entities and DeFi systems.
Major firms in the traditional financial sector are being increasingly drawn, with entities such as Franklin Templeton and Goldman Sachs building offices in the blockchain space.
The Impending Bitcoin ETF And Its Impact: Pal views the anticipated spot Bitcoin ETF as a “trade agreement” between the fiat and crypto worlds, facilitating foreign direct investment (FDI) into cryptocurrencies.
This agreement is expected to ignite risk-taking and capital recycling in the crypto world, with speculation already shifting toward an Ethereum ETF.
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The Ethereum Digital Nation-State: Pal described Ethereum (CRYPTO: ETH) as a more developed “digital nation-state” within the crypto world, complete with its states (L2s and other L1s), asset markets (NFTs), banks (DeFi) and monetary policy (burning mechanism). This complex structure underlined the sophistication and maturity of the Ethereum ecosystem.
Global Liquidity And Asset Price Dynamics: The crypto world, according to Pal, benefits disproportionately from global liquidity injections compared to the fiat world.
A $100 billion inflow in the space, which is smaller in total asset size compared to the real world, has a much more significant impact on asset prices due to lower liquidity.
Future Outlook, Crypto World’s Ascendancy: Pal anticipated that within two years, the crypto space could become the “most populous and fastest-growing…
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