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CHAPTERS
- 0:00 – 1:16
Metcalfe's Law and Network Owners Aligned with Users
Raoul Pal explains why he loaded up on Ethereum: Metcalfe's Law drives crypto markets and most tech stocks. Unlike Facebook, where shareholders and users are not aligned, crypto marries network user and owner.
- •Metcalfe's Law as the primary driver of crypto markets and tech stocks
- •Facebook's shareholders profit while users only get utility
- •Crypto aligns network users with owners
- •Shaan calls it religion meets Metcalfe's Law; Raoul says religion meets capitalism
- 1:16 – 4:20
From Goldman to Spain: Retiring Early and Writing Global Macro Investor
Shaan asks about Raoul's career gap between his hedge fund and Real Vision. Raoul describes writing a monthly publication from Spain, living a beach life, and missing intellectual company.
- •Goldman, then a hedge fund, then retirement at 36
- •Global Macro Investor written in a weekend each month
- •Growing fruit and vegetables on a Spanish hillside
- •Missing intellectual capital in an isolated beach town
- 4:20 – 7:49
Winning the Game of Life: The House in Spain
Raoul says the game is quality of life, not money, and describes living in the future and working back. He tells how a Mallorca beach scene led him to buy a house in Spain in cash, which let him take more risks.
- •The game is life itself, not money
- •Living in the future and looking back to plan steps
- •The Mallorca paella table as the vision of quality of life
- •Buying the house in cash at 30 meant he had won the game and could take bigger risks
- 7:49 – 11:36
Seeing the Next Chapter and Leaving Goldman's Equity Behind
Shaan describes how glimpses of other lifestyles trigger his own life chapters, and Raoul says entrepreneurship was his next step. Raoul discusses earning over a million dollars a year at 30 and losing millions in Goldman stock when he left.
- •Glimpses of other lifestyles prompt new chapters
- •Missing intellectual capital led Raoul toward entrepreneurship
- •Earning over $1 million a year at 30 selling derivatives to hedge funds
- •Preferring cash to restricted stock and losing millions of equity by leaving for GLG
- 11:36 – 17:47
Leverage, Collateral and the First Bitcoin Bet
Raoul explains how the financial and European crises shaped his thinking about leverage and collateral. A friend pointed him to Bitcoin, he wrote his first macro piece in 2013, and he bought and sold for a 10x gain.
- •Total leverage and many claims on the same collateral
- •Attempt to start the world's safest bank with family offices
- •2013 macro piece valuing Bitcoin as a scarce digital asset
- •Selling after a 10x and a divorce halving the proceeds
- 17:47 – 22:08
Going All In: From Bitcoin to Ethereum
Raoul returned to crypto in 2019 and 2020 as central banks printed money, then found Bitcoin's performance dominant. Digging into Ethereum, he found its charts compelling and viewed it as like the internet.
- •Positioning for recession and money printing in 2020
- •Bitcoin's dominance versus other assets
- •Price charts and exponential behavior of crypto on a log scale
- •Ethereum seen as having many applications, unlike one-sided Bitcoin
- 22:08 – 27:13
Network Effects and Owning a Share of the Network
Shaan shares his own similar path and defines network effects. Raoul argues that crypto lets you own a share of the network, using Web3 engineering talent as an example and likening Eth to Oracle capturing the internet and NFTs.
- •Shaan's parallel path and bet on a money network
- •Definition of network effects using language and telephones
- •Web3 engineering talent demand as an exponential example
- •$2 trillion digital asset market possibly reaching $200 trillion
- •Owning Eth as exposure to NFTs
- 27:13 – 32:49
Why Raoul Changed His Mind on Bitcoin and Institutions
Raoul explains he soured on Bitcoin's community for rejecting newcomers, while institutions turned to Ethereum. He describes institutional money arriving as a flow and the fund of hedge funds he started.
- •Bitcoin's community seen as repelling new participants
- •Institutions put off by 'have fun, stay poor' and laser eyes
- •Institutional interest moving from Bitcoin to Ethereum, DeFi and Web3
- •Fund of hedge funds as another route for institutions
- •Expected stampede when prices rise again
- 32:49 – 35:10
Holding Eth Without Yield and Using a Learning Budget
Asked what he does with his Eth, Raoul says he doesn't stake or use DeFi, tying it back to the house in Spain. Shaan describes keeping a small learning budget, and Raoul says he prefers capital gains to carry.
- •Not staking because risk of hacks or rug pulls isn't worth a small yield
- •Once you win something, don't let someone take it away
- •Shaan's small learning budget for DeFi and NFTs
- •Carry versus performance approaches
- 35:10 – 39:45
A Frame for NFTs: Smart Contracts, Scarcity and Community
Raoul explains smart contracts as putting contracts on a blockchain, then NFTs as giving digital assets scarcity. He describes NFTs as community membership, tribal identity, and a future digital identity, with social tokens as a bigger idea.
- •Smart contracts can record and verify nearly any contract
- •Digital things trend to zero, so NFTs introduce scarcity
- •Communities like Bored Ape Yacht Club and CryptoPunks
- •Social tokens and digital identity
- 39:45 – 46:30
Tokenizing Culture and Reinventing the Music Industry
Raoul describes how tokenizing communities makes culture an investment aligning artists and fans. He explains how musicians could bypass middlemen with social tokens and NFTs, and how token holders become free marketers.
- •Tokenized communities make culture investable
- •16-year-old fans backing future pop stars, which he calls universal basic equity
- •Middlemen taking 80% of music economics
- •Token sales de-risking tours
- •Token holders incentivized to market for free
- 46:30 – 48:26
Societies as Social Tokens and Where to Follow Raoul
Raoul argues that countries, religions, Bitcoin and Ethereum all work as networks driving value through narrative and incoming capital. The conversation closes with Raoul's Twitter handle and his free crypto channel on Real Vision.
- •Countries, currencies and religions as social tokens
- •Narratives that attract capital to support networks
- •Reference to the book Sapiens on human self-organization
- •Raoul's free channel at realvisioncrypto.com
