Ethereum

Macro guru Raoul Pal unveils new valuation model for Bitcoin, Ethereum, XRP and Polkadot, says crypto is growing much faster than the internet

Macro guru Raoul Pal unveils new valuation model for Bitcoin, Ethereum, XRP and Polkadot, says crypto is growing much faster than the internet

According to macroeconomics expert Raoul Pal, crypto assets are growing at a much faster rate than the internet.

The founder of Real Vision and Global Macro Investor says he’s spent a lot of time and resources updating his numbers on global crypto adoption — and the data is clear.

“2021 has been a year of accelerated growth and the effect of Reed’s law of networks building on networks creating even more exponential is clear. But the sixth year after the first five million users, crypto has 295 million participants and the Internet 119 million.

Crypto is growing 137% annually while the internet has grown 76%. As I always say, this is the fastest technology adoption the world has ever seen. »

Pal’s new figures are based on data from Crypto.com, the World Bank and Global Macro Investor itself.

Source: Raoul Pal/Twitter

He says that even though the growth of the crypto economy slows in step with the expansion of the internet, the crypto industry is heading towards a staggering five billion users by 2030.

“Using the 76% growth rate (suggesting a nearly halving of network growth as the network matures), we now get to 5 billion users by 2030.

That is to say, it becomes THE main source of ownership, transfer and registration of the value and global contractual conditions. Wow!”

Pal says he has also developed a solid way to determine the value of a given crypto network by multiplying the number of daily dollar trading volumes by the number of active users.

Pal says his equation tracks the market caps of Bitcoin and Ethereum as well as XRP and Polkadot (DOT) remarkably well.

Source: Raoul Pal/Twitter
Source: Raoul Pal/Twitter
Source: Raoul Pal/Twitter
Source: Raoul Pal/Twitter

Pal says Ethereum (ETH) could eventually reach a larger market capitalization than Bitcoin if its ecosystem of decentralized applications is widely adopted.

“Each chain creates value for different reasons – BTC for immaculate guarantees, security and store of value brings large numbers of users transferring large sums of value. That’s why it’s the most valuable network .

But ETH has more applications and the transaction value per monthly user is broadly in line with BTC. So, if ETH attracts more users over time, it will reverse BTC’s market cap (that’s okay because we’re comparing apples to oranges! Both have different values/uses).

Pal also details specific price targets for Bitcoin based on various adoption rates going forward.

“Assuming BTC remains one standard deviation below the trend, that gives a price target of $600,000. If it slows to two standard deviations below the trend, you get a figure of around 300,000 $.

Perhaps the downward trend should be taken from 2013 to avoid the very early peak. This gives slower growth and lower goals. This gives a trend at $700,000, one standard deviation [above] at $350,000 and two standard deviations at $200,000.

Pal says that NFT communities can show the same metrics of growth, and the key way to tell if a crypto network is creating lasting value is to see if it moves large volumes of capital daily between a growing number of people. users.

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Feature image: Shutterstock/Tithi Luadthong