Macro expert and former Goldman Sachs CEO Raoul Pal says that while negative sentiment across the cryptocurrency industry is at an all-time high, its fundamentals remain strong.
In a new interview with Impact Theory co-founder and host Tom Bilyeu, Pal said investor negativity is higher than he’s ever seen, including during the Great Recession and the bursting of the Dot.com bubble.
“What we have is the peak, because the earthquake happened and everyone’s sensitivity. Never in my career have I seen such sentiments, both in cryptocurrency and the stock market. Twitter is so bad. I charted relatively bullish, only marginally bullish, to say maybe the NASDAQ had Fate is in great recession. I must have 100 comments of outrage, how dare I suggest [that]?
There is anger, resentment, and fear in this moment on a scale that it wasn’t in 2008, nor was it in 2001. I’ve never seen anything like it. “
But Pal says the cryptocurrency space is optimistic with widespread adoption by institutional investors, noting that big tech is increasingly intertwined with the crypto industry.
Has anything changed in the cryptocurrency market? DeFi (Decentralized Finance) Failed? No. Does the idea of a decentralized financial system work? Yes. Is cryptocurrency exchanged in an online value system? Yes. Is the number of people growing in this ecosystem? Not much, because it is stable.
But if you look at the past cycle, so we lost about 80% of active wallet addresses in 2017, peaking to the lowest level in 2019. When I look at it now, we lost about 30% because adoption continues to go up.”
Pal says investors should take a long-term approach to investing in cryptocurrencies, buying during panic dips and holding their assets to see gains in the future.
“So it’s really a psychological game. And it’s a long-term game. We’re not involved because we can make money over a year or two. We’re saying, listen, the bet here is if you hold and if you add at the bottom of the panic cycle and you continue to hold and don’t use leverage And be aware of what you do and don’t do. Keep checking the market every day, the possibility [is] of coming at the end of the decade and projecting yourself into the future in a way that is perhaps quite unexpected.”
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