137842703 - 1_qvzkp46x - PID 1851201 >> Hi. The video you're about to watch is a really important video. It's a real journey of understanding. I did this pretty much in one take, without notes, just sitting down to get what's in my head out on video. The first 70 minutes, the sound code is pretty crap and that's my fault, because I went raw, did this without producers, editors, anybody because I knew I had to do it. Excuse me for that, it does get better as we go on. Also, once I've rewatched it, I realized that there were some foot notes I wanted to add, further clarifications, further learnings, that I thought were really important into this. Make sure you watch through to the end as well. Really hope you enjoy it, and again, apologies for the crappy sound at the beginning. Hi. In this piece I'm going to be representing myself as Raoul Pal of Global Macro Investor, as opposed to Raoul Pal CEO of Real Vision. I like to make difference between the two because Real Vision doesn't have an opinion but I was to do, and I'm paid to have an opinion for some of the world's largest hedge funds, sovereign wealth funds, family offices high net worth etc. and that's my research business, Global Macro Investor. I want to give you the really big picture where I think everything is going and it's obviously mainly about the digital assets space, because I think it's the single most important thing for everybody to understand. In order to do that, I'm going to give you my journey of discovery so you can piece together some of what I have learnt on my way. Because there are many narratives you've heard me speak about, but I haven't really put the whole lot together to give all of you something really meaty to get your heads around. Again, you don't need to agree with all of it, but I want to show you my journey, how I got here, what I think is going on in the macro backdrop, what I think this means, and why I chose bitcoin and then cryptocurrencies. Why I diversified, what do you think the actual space is really headed and where this whole thing is going and how it fits in to the future of everything. It's going to take a bit of time and it'll take probably a few watches of this to get across everything that I'm trying to talk about. Let's get back to the beginning. 2000, we started to see the debt bubble increase and the rise of central banks. Alan Greenspan back in 87, was the first one stop using interest rates to stabilize markets, that became modus operandi by 1998 when long-term capsule blew up. Defected it again and again under Greenspan, then 2000 we had the stock market crash and the recession and again, interest rates we used heavily. The money illusion meant that lower interest rates, people thought I'm going to take on more debt, so they took on more and more debt and that led to the housing bubble as we know, and then that blew up and almost brought down the world's financial system. I was in Spain at the time. I had left the hedge fund industry, but I was still writing as I do today in Global Macro Investor, and I realized that the fragility of the system was now becoming the most urgent thing and that after 2008, we haven't really solved it. In fact, it was bloody clear by the time we've gotten to the European crisis in 2012, that it was not solved at all and debt was the big issue and the only answer at this stage became the printing of money because there was no other way to deal with it. It had become too big, too gigantic, too scary, too dangerous for anybody to let the fire burn. The whole Austrian economic idea of creative destruction was now almost impossible to implement because the destruction would have been total and complete. Many people think, the bankers could have gone under, maybe we should have let everything clear, at this point with this many old people as baby boomers into their retirement ages, you would have wiped out everybody savings and investments too. That is okay, if you're starting from nothing, but anybody who'd started with anything would have been entirely destroyed. The story shouldn't be a surprise to you, because it is the story of Japan. We saw this in Japan, where the Japanese realized that their aging population and they're saving assets could not be destroyed, so the only thing to do was try and manage crisis via the role of the Central Bank and the merging with government policy and fiscal policy. Japan has been basically the petri dish for all of this, and almost everything Japan has done has happened elsewhere in the world. But after 2012, I wanted to make sure that there was a way out. That was the first time I wrote an article. I think it was back 2013, I wrote an article called the Life Raft, where I talked about gold and in fact, bitcoin. I had started to have bitcoin on my radar screen. As some good friends [inaudible] Global Macro Investor members had been involved in early days. I was going to set up the world's safest bank, that was the idea. A bank that only holds you treasuries, and that any money on deposit was entirely match by treasuries that were held at the Fed, no rehypothecation, no nothing. It was kind of a bank outside the banking system. I had bad idea, but it was bloody hard to set up a bank and people like Caitlin Long, [inaudible] , it's really hard to do. I was running around the world looking at this idea and the bitcoin idea came to me from [inaudible] said to me, "This might be your answer." I had seen it and looked at it, and it was very interesting. In 2013, I bought it, it went up a 100 percent in a month, then I sold it and It was wow, what was that? I wrote an article in 2013 or 14 about the stocks to flow of bitcoin, looking at investors golds, and saying with gold at about 1300 bucks where it was at the time, I would impute roughly without the great mathematics that my friend Plan B has managed to do, but I had a rough rule of thumb that because is probably worth a million dollars in comparable terms using stock to flow. How much gold is on the ground, how much gold is being mined, etc, and back computing into the bitcoin price. That gave us a macro framework, and that micro framework became quite well known at the time and got passed around and got many people into the spaces. Then I was out to the space for a while and got back in around 2015-16. I started buying again, probably around 200 and I think I sold out early when the forks were happening that was the fad of the day. We've had scandals all the way through S curve moments within Bitcoin. That moments entirely understand the ecosystem, I didn't understand the adoption effects and Metcalfe's law, and it was much earlier. I thought this was an existential crisis when you're forking something, what did it mean? I wasn't comfortable and I've made 10 times my money was at 2,000 at that point. I took profits and obviously it then went up another 10x and I felt like an idiot. Well, I didn't have money in the bank, but I didn't make as much money as I could have done, should have done. I didn't have a massive allocation, reasonable size, but not life-changing amounts. But it taught me a lot about the cycle. I pretty much saw the top of the market and then it came down. I still believed in what Bitcoin was, but I didn't think at a time and a place right now. I thought that was important because macro does matter to Bitcoin doesn't exist in a vacuum. It was off my radar screen and I was looking at most macro opportunities, so we're talking about 18, 19, we saw some interesting opportunities in the bond market because I thought that the global business cycle is slowing down. We had one last shot at the rate trade, the heroic trade of loading up on your dollar features that the Fed had to cut and an offset the rising in rates that they've done. Either the bond market was going to stop let pricing deflation again, as my economic indicators started forward-looking, predicting recession. That came, as we know in March but we go back a bit, I'd always said that Crypto and Bitcoin particular and macro were same thing, they just didn't know it yet. Most participants didn't know it and didn't understand it. Crypto came from a different community, it came from a community of developers that are Cypher punks. It came from Austrian economics school of philosophy. It came from libertarian philosophy, it came from a number of different things, but it started to attract the attention of finance people, particularly the macro guys like myself. Our job is to find assets that best represent our views and where we are in the world and we are all without question, troubled by the debt super cycle and how this all plays out. When we saw Bitcoin, one by one, people moved across famously [inaudible] was first. Then a lot of people, whether it was John Burbank, Mark Yusko, whether it was Dan Tapiero where it was myself, Mike Novogratz, I mean bit by bit, everybody from the macro world, Stanley DruckenMiller, Zeta Jones, Allen Howard, you name it. They're all moving across, because they've seen the magnitude of the opportunity, because we all knew that they weren't parallel paths, they were converging paths, and they all converged last March. That's when I got really excited when Bitcoin collapsed in the big liquidation. It had been building this beautiful chart pattern, that beautiful massive, gigantic wage which I called the best chart pattern in the world in a break of 10,000 was going to be the confirmation. I loaded up with every single penny that I had available and so I've put it all in to Bitcoin and it broke out, because what was going on was we were now going into the biggest recession, maybe an all recorded history. As you remember, my thesis was liquidation phase, which was into March, and I closed down my shorts. Then it was going to be the hope phase and then it was going to be the insolvency phase, so the hope phase happened, and that was built on vaccines and things are going to be okay and herd immunity and all the narratives that happened. But something different happened as well. Interesting enough, the real-time economies never really picked up for a while. They did exactly as expected, but the markets did, markets are the opposite. I said we'd probably finished the year on negative three to negative five percent year on year GDP growth, and that's exactly where we got to. The hope was misplaced because the economy was **** and people had been laid off and the structural unemployment, and many of the people in retail, for example, are never going back to jobs again. There was a real structural problem, the insolvency phase should have been that the triple B entities, the giant corporates, should have run out of cash because they didn't have enough cash flow to paper over the debt payments that are in needs to make, so it becomes harder and harder, the equity price falls and all becomes more difficult. But that was also going to happen at household level. Where some people were furloughed, some people were given payments, but eventually the payments stopped, and if they didn't have jobs, the musical chair stops, and the economy is screwed. The same with small businesses. We saw immediately the government do something it's never done before, which is instant transfer payments, which was stunning move towards a more MMT hostile environment where fiscal policy and monetary policy are roughly the same thing, or they work hand in hand, which is what we've seen in Japan over the years. That was amazing it helped a lot of people and basically delayed the insolvency phase. Technically, many firms, many people, many businesses are insolvent, but had been kept alive by the central banks and the governments, and still to this day, we're still in that same cycle. It's become apparent, and I talked about it in the past, is governments and central banks have to do absolutely everything to avoid the insolvency phase. My guess was there were unlikely to resolve it all, and I think it actually plays out longer and is actually in reality in play. But we're not going to know until we try and revert back to some normality. This is one of the key reasons why the central banks simply cannot allow rates to go up because you will destroy any chance of recovery. Anything that the market wants to go there and try and price in high rates, yield curve control is going to kick in. We've got pseudo yoke of control in Europe and we've got yoke of control in Australia. We've got it in Japan, I don't think it would come in the US. That means that rates can't actually price inflation. Now, I'm not an inflationist , I think we will get cyclical inflation because of the supply constraints and the massive rise of people coming back into the labor force and back in the economic life. But as we settle down, I think the debt deflation, narrative, technology, globalization, aging population, all of this stuff continues to well inflation and over time, as the economy settles, the trend rate of growth, potential inflation falls. I actually think trend rate of growth might change positively, and I'll come on to that at the very end of this, but it's not really a piece for this and that all comes later. But it's the macro backdrop of that, that is very important to understand because within this, the only answer was the creation of more money. That creation of more money was clearly going to be very beneficial to Bitcoin because it was basically created for this. I pointed out early on back in March and April that Bitcoin was two things, it was this store value narrative and it also had a call option on the future. I started developing some big metanarratives to help get people across the line. Because I know it's a scary different world and people didn't want understand where digital bunny, I don't want to throw money at this, but I tried to explain to people in simple terms, things like pristine collateral, how this is superior than many things that we have in the existing system, or in fact, all of the things that we have, how it acts differently, how you can't create more of it, so its collateral is worth more and therefore its a better foundation stone for the financial system of the future. How's a store of value it offsets the monetary printing. How this could have all transition into a future economic system that had incredible value? That's what made me irresponsibly law. That I think helped a lot of people get across the line. The next part of it that I think was maybe the light bulb moment for many was my New Bretton Woods, the Bitcoin Lifeproof piece. That essentially was saying that, "Okay, what also is coming is essential banks have seen this digitization of money and they want to be involved. They want to be involved by creating a central bank digital currency, not as a competitor to Bitcoin, but as an ancillary agent within this new digital money system." That's all well and good. That's basically government stable coins. Fine, I get it, it's much better. It works really well. But it also has other qualities, because the other qualities are its programmable. Essentially central banks can program money so we all have different monetary policy or different tax regimes or whatever it may be. The point being is behavioral economics is going to shoe horn its way in to monetary and fiscal policy which are combining. At that point, we are really beholden to what central banks do. Can they destroy money? Can they destroy our capital, our savings? Of course they can, and we needed a life raft and Bitcoin was going to be it. Now, as we wind forward, we're now seeing pretty much every government on Earth running record deficits. This means that theoretically there were bankrupt. But we know in this modern world of printing of money, bankruptcy and governments doesn't mean the same thing unless you can't print money. Hence, why emerging markets get bankrupt, developed markets don't. The answers to these record deficits is all the story of debt rarely, how do we finance that debt? Well, you finance it in the age old way, taxation, inflation, and debasement. Taxation around the world is going up everywhere without question and there's very little things you can do about that because of the legalities, whether you like it or not. But inflation and debasement there two different things. Now, central banks around the world have put inflation targets that are higher than where we are now. Will they be able to meet those? My view remains and has been for the last 20 years or maybe even 30 years, no, I don't think inflation is structurally able to be generated. I could be wrong, of course I could. Let's wait and see the massive amounts of fiscal stimulus that has to come because these deficits aren't going away. There's another round of huge stimulus to come this year in the US alone, let alone Europe. Now Europe is obviously slowing down with the virus again. There is more stimulus to come and there's more stimulus almost everywhere. I don't think maybe that infrastructure spend generates inflation, maybe it's just cyclical, maybe it's structural, maybe everything changes. I do not see how you get around the rise of technology, the aging population, globalization, and the dynamics of debt. I don't know how you generate inflation in that. Let's assume that, that doesn't happen. It's cyclical, speaks the bond market, the Fed do yield curve control and expand their balance sheet again when that happens. That's an interesting thing. But monitoring debasement is the thing that I thought about and I think people confuse inflation, CPI, and debasement. You see most people are looking for the dollar to collapse, not really thinking through the fact that everybody else is also printing money and it seems to be sure the dollar might go lower when they're doing more than the Europeans. But overall, if you look with honesty at the dxy, something that I was expecting to see break higher either dollar higher over last year and it didn't. But when I look at the chart, it didn't break lower either because everybody thought that it looks like it's range bound, at about 96 is the average. So therefore, currencies don't move but that's interesting, that got me thinking and rates can't really move either because if they go up, then yield curve control comes in. If they go down, they're going to try and stimulate more. So then rates come drift all of it. Let's say US 10-year rates or maybe range bound between zero and two percent maybe they're going negative maybe not. But either way, there's no breach going to happen the debt of macro in rates, I think it's writ large and I know many people think no, you can short rates forever. Inflation's coming back, but the central bank is not going to do that and we've seen that in Japan. What's very interesting is that as yield curve control comes in, it means that they buy bonds and the Central Bank buy bonds, buy printing money. I've looked at that and it looks at, if there's no inflation, then where is this monetary printing going? The argument had been for a long time, though I didn't agree with. That QE found its way into financial markets and I feel, I don't see that mechanism per say. Of course, it finds its way in some places. Wealthier people, corporates with better balance sheets find it easier to borrow. You see it in the credit markets, how easy they are, that kind of thing, I get that. But the equity market was the one that didn't really pass the small test. Because the equity market rose in the back of QE, but volumes didn't. So then what's the buyer? Where is the buyer, what's going on? It's at that point, I started looking at the chart, Bitcoin versus other assets and many of you will have seen this in macro insiders and also on Twitter. What became clear, and this was weird. Now I'm talking about September, October last year. That Bitcoin was about, had all ready and was about to outperform every single asset on earth. All of the charts of let say Bitcoin verses the S and P, Bitcoin versus the Nasdaq, Bitcoin versus gold, Bitcoin versus real estate, Bitcoin versus anything, anything I could find, any asset. You can all find a single stock that's done better. But an asset class, not one asset class on earth looked like it was going to outperform Bitcoin. I've never seen anything like that in my entire career, that made me pay attention. Then I put it against the Fed balance sheet. First, I looked at the S and P versus the Fed balance sheet. Because the Fed balance sheet is the purest expression monetary printing, I also used the G4 central bank balance sheets to look at the global printing of money. But let's use the S and P versus the Fed balance sheet, you can see the chart here. The market basically fell in 2008, 80 percent and trade sideways ever since. In this chart, what's interesting is gold look similar. If you look at the charts of gold divided by the central bank balance sheet, it looks similar and if I look at the charts of real estate versus the central bank balance sheet, it too look similar. But if I look at the chart of gold, which is the oldest denominator, the form of money against the S and P, S and P doesn't look particularly expensive, little bit expensive, but not the bubble that we're seeing and that got me thinking about these relative asset prices and the fact that Bitcoin was outperforming everything and I realized that I think we're all looking at this wrong. I certainly had been what that chart shows or those charts is that the denominator, which is not the US dollar per see, but the value of their currency in terms of what assets it could buy, because these are all fixed assets essentially, or low supply assets. Anything that was a low supply asset was going up in price. But it's going up in price in dollar terms. But when you look in money printing terms, they were basically holding their own after the massive clumps of 2008. That intuitively feels right to us. The anger and the frustration and the economic misery that's happened since is a function of that and that make sense. Variable inputs like consumer goods and wages were destroyed by this and that makes sense too. So, with your wage, you were able to buy less assets. If assets are a way to create savings for future consumption, you're able to buy less of them and so, analyze the pension crisis. Analyze the ability for millennials to buy housing. Analyze why the middle-classes got hold out. Now, obviously, wages is also a competition amongst global workers. It's also a competition, importantly against technology which is slowly grinding away and destroying job of the job of the job. This is creating this imbalance, everyone is dead right. The central banks are creating the problem here because they're doing the age-old thing of debasing currency. Everybody's looking the wrong way because they're looking for CPI inflation saying cost of goods are going up, yes and no. The cost of some things are going up. Things that are driven by the baby boomers because they've been the driver of inflation, stuff like health care and also their kids. The millennials record number drove up the cost of tuition. That's actually coming down now because they're all coming out of university age and the Gen Z generation is smaller, but the boomers still drive that. But overall, the basket of goods falls, but the basket of fixed assets keeps going up and what it's doing, it's just readjusting its price terms versus the fall in the denominator since 2008 which is the endless printing of money. It's not that it's creating a bubble. The bubble is in the central bank balance sheet, the assets are not in a bubble because when you look at them relative to each other, they make pretty much total sense. So that's a big change of thinking. You need to think about what that means. But the only asset in the world that is offsetting the monetary printing is not gold, it's Bitcoin. Bitcoin is not only offset the monetary printing, but massively outperformed it. One other asset has, which is the Nasdaq after 2008, before 2008, no. Bitcoin didn't exist before 2008 either. In fair terms, the Nasdaq doesn't. I'll come on to that towards the end. But Bitcoin is the one thing that is outperforming the Fed balance sheet and that means that it is offsetting the debasement of currency. We can look at this trend globally too. It works for the MSCI world verses the G4 central banks. Everything is basically a function of any limited supply asset is exploding in price, this is where the art market is going up, the wine market is going up, the classic car market is going up. It's not because rich people have exponentially more money. Well, they do because they can buy these things and they go up in price. But actually, even real estate has only basically offset that debasement of currency. Once I realized that and that Bitcoin was going to be the supermassive black hole that eats all other asset classes. I just realized there was no point doing anything else. It's the same point we know real isn't crypto because I realized it's the biggest ******* thing I've ever seen in my life and the more time I spend it the bigger it is, I wildly underestimated how big this hole is. Now there is a school of thoughts now that Bitcoin, as it develops, becomes the one true money. Is it possible? Of course, it's possible, is it probable? Less probable I think. I don't really believe in the aggressions law that all money attracts goes to the hardest form of money. I don't think that's been proven out over time, but I understand the arguments and right now it doesn't matter. Also, but I do believe that Bitcoin is the foundation stone of what we need for a new financial system, because we're certainly destroying the one we're in. It's self-destruction. There's no bond market collapse. The equity market is not allowed to collapse, because the central bank prints money every time. Now that money doesn't flow into the stock market, the stock markets read pricing. Again, just to get this across, here's the chart of the Venezuelan Stock Market. It's gone exponential. Here's the chart of the Venezuelan Stock Market in dollar terms. It's collapsed from the currency devalued and then traded sideways since. That is exactly the same mechanism in the [inaudible] Republic. Now, I don't necessarily know or think we go that far but who, the **** knows. That's what we need the right life after, because we're going into unprecedented times. Now, what's so cunning about this strategy? It doesn't show up in the bond market, and even if it does, it gets hidden. It doesn't show up in CPI because it's not changed the cost of computers, or TVs, or food, doesn't do that. It doesn't show up in things that look bad. The equity market goes up. It's not obvious to people how they're getting screwed, but everybody knows they're getting screwed. It's the change in the denominator, the devaluation of fake currency overall, that means you cannot buy as many assets as you could and therefore, your structural savings are worse. Now with record low-interest rates, you now have no chance of making money, or not a big contender. Bitcoin was the game-changer. The supermassive black hole that people were going to realize was going to suck everybody in. It is definitely going to form this basis of the financial system because it is pristine collateral. Right now, collateral for the whole markets is US treasuries, but bizarrely enough, you can create more of them. One might hold your collateral if you keep creating more of it and the yields full. I get rewarded less for lending out my collateral to you, why should I? Bitcoin entirely different. The structure of Bitcoin means that you can't create more of it, so as a piece of collateral is extremely valuable. It doesn't change because the government can print more of it like the current lateral. It is pristine. It's also fantastic store of value, because of the limited supply of all the other parts of the robustness of distributed network. It's an incredibly powerful technology that we all know by now. That takes me into about December. In December, I started digging into a theorem. I wanted to understand the crypto space at large. Because when somebody tells me, and many people did, don't look at anything else, you're a scammer, you're a shake con, you are a fraud. If I look at something else that makes me want to look at it. I started digging into a theorem. I realized how incredibly, robust, and ecosystem it was. The share number of developers, programmers, applications, the ecosystem was bigger than Bitcoin. The growth in bullet addresses was about the same pace as Bitcoin. I'm starting to thinking about that. I got sent an article by, I think it was the night dig guys. They were looking at Metcalfe's Law, and I understood Metcalfe's law, and how it probably applied to Bitcoin. But I asked Remi and actually reached out to Santiago Villas and said listen, "Can you help me develop a Metcalfe's law model? Just a simple one. " We don't need the complex maths. We need to prove that Bitcoin is basically priced in that, and maybe that stops to flow is representing that in a different way. Again, I'm not trying to refute the thought flow model, I use it, I love it. Everything plan B is done as a game-changer and it deserves all the plaudits. But once I started understanding the power of what Bitcoin was, it was clearly a behavioral economics driven model, the best of all. Behavioral economics and Facebook is why Metcalfe's law exists in Facebook, is because it originally, you bring on your uncle and aunt, your friend from school, blah, blah, blah. You create your network of people who can keep in contact with them and you can communicate with them. That became network effects and then businesses came on to create a more network effects, etc. But the shareholders were the ones who got rich, not the users. The shareholders benefited from the exponential re-evaluation of the network, because Metcalfe's law essentially is the value of the network goes up with a more notes in operation, and so the users were separate from the capital. The investors got rich and the user got to talk to their friends and then their parents joining Facebook and they all left into Instagram, etc. Bitcoin was a groundbreaker, I'm sorry, all of the Silicon Valley models were basically all of the same. They were all Metcalfe's law. Everything that came out of the internet, from Google to Facebook to Reddit, the whole **** lots of them. They all came out of meetings with people like Daniel Kahneman, the one of the godfathers behavioral economics, who basically taught them how to trigger dopamine receptors in the brain by light buttons and multi coins, and how emotion drives behavior because it's all behavior is what you're trying to do. But with Bitcoin, you've created a network driven by behavioral economics, which is the network of money, and every participant gets rewarded by bringing participants in. That's creating an incredibly robust network effect. In fact, it's genius, because more of us who believe in it, the more we're trying to other people in, the more we'll get rewarded for it. The behavioral incentive is extraordinary. That is a way to gain adoption for a new money, because otherwise, it's very hard to do. It's very hard to get adoption unless you get rewarded. This is stunningly good. But I wondered how you can value a theorem because a consultancy have to value Bitcoin, why is it exponential? Why we have to use log charts? It's because the network effects on more people mean that the chart is always exponential. We've only just started, I mean, we've got billions of people to bring onto this, so this is going a lot further. I talked about it, I have no problem when I use this log chart, for example, it would suggest potentially this rally could take us to 400,000, maybe even a million on an offshoot, because of the world of money that I've talked about as institutions come in. Maybe not, maybe plan B flow is right, and it gets out 288. I don't know. It doesn't really matter right now, but I think be surprised because that's what network effects get more exponential over time. But when I looked at the theorem, the thing I was told not to look at, I realized that not only was the technology very interesting, and yes, it has problems and yes, it's very different to Bitcoin and in fact, it's not even the capacitor to Bitcoin, it's just part of a new digital asset ecosystem. I realized that a theorem was probably the basis of the Internet of value. The Internet of value is something hard to get your head around as well, and I'll talk a bit about it later but basically, anything that you exchange, that has value is going to be digitized, and a theorem is breaking the ground for that. Now there's the theorem 2.0 coming out which actually hardens it as a platform and lowers the supply and it speeds it up and probably cheapens the cost. It is not perfect, Bitcoin is not perfect for certain things. There is a massive ecosystem also been built in layer two solutions. Theorem has lead to solutions too, but it's also able to be changed, which is not Bitcoin, because Bitcoin is this hard, super wonderful asset of money, the theorem is not that. This war between Bitcoin and theorists is nonsense, they're not even the same thing. I started to get the Internet of value and we started to see the rise of DeFi, and I will come to that again. You can start to see real applications that we're getting massive network effects immediately. Then I put the theorem in the same terms as I looked at the network effects of Bitcoin, which was using essentially number of active wall addresses, and it's a simplistic way of sharing network effects. What it showed was Metcalfe's law when I put it against Bitcoin, if you see the chart here, you can see it's basically exhibiting the same traits as Bitcoin, in Metcalfe's law but actually the adoption's earlier and faster. Then when I put the chart of Ethereum against Bitcoin, starting at 5 million more addresses to rebase them to a point where network effects thus taking hold. Their prices were identical and the child patterns are identical, but there were about four years is different. These have been valued at exactly the same, at different points because it's only the network effect that's valuing them. That was incredibly exciting discovery in it, I realized that the entire space is driven by network effects only. Then you understand that some tokens and some get network effect and then have S-curve moments, so they start to look like to get adopted, nobody really uses it and it falls. That's called the S-curve. The S-curve can be a failure or a pivot or changing use and then it goes. We've seen that in businesses and startups all the time, and we've seen it in Bitcoin where the narrative has changed Mt. Gox is going to be a scam. It's all about dirty money. Bitcoin goes off 2013 S-curve. Back up exponential it survives, and we go into the next set of fund narratives S-curve. That was abandoned by China, that for King and all the other stuff S-curve, then back up again. Now we've got the lindy effect, which is basically becomes a straw it's going to get stronger. Ethereum is going through the same, and this whole space goes through the same, some fail, some that don't fail gets stronger. That was mind-blowing to me. I now realized I had a framework of understanding that I could apply to anything within the space. That was the big growth for me. But when you look at the speed of which this happens, because don't forget exponential means it gets faster all the time. In long chart, it looks normal, it's a linear, but actually is non-linear it's smooth. We've seen this, I mean, I had an interview with CZ who built finance in three years, he went to the largest crypto exchange and one-and-half thousand employees. I think it's the fastest startup in history. Speaking to Salmon FTX. I don't know how he did it, but he got this whole from idea to launching in four or five months, and then a year later, the third largest exchange in the world. Look at Coinbase, 56 million accounts. That's more than Robinhood and Fidelity added together. It's astonishing the network effect, and we're bringing in the institutions and they're spreading into Ethereum, and everybody else is building products from the theorem. It's coming as a lightening speed and I don't I think the space can catch up with the narrative change that is happening so fast. First was the rise of alternative Protocols, Interoperability, Polkadots, Chainlinks, etc, the alternatives to Ethereum. Things like Madonna, different types non-block chain, like an error. The list is endless, and I know you can say you didn't mention my favorite coin I don't really care at this point is too many of them. I can't figure them out. But there were some really exciting things because I sit back as a macro guide, look at the megatrends. What is the megatrend here? First define holy ****. Here is a whole lending, borrowing system, probably insurance system all distributed on blockchain. This is what the world needed. Now, it's really nice and some of these are going to blow up, some are going to work. Which ones do? I don't know. I'm investing a whole bunch of these and I'll just hold them as a basket. But, oh my god, this is changing everything. There's Bitcoin lending markets. Remember what I was talking a year ago is, we need a Bitcoin yield curve, Christ it's happening everywhere. There's yield curve popping up on everything. This is all going on. Different space is exploding. Now friends of mine who were like sold some of their Bitcoin and then gone through the realization, for they don't even need to put it back in a bank because they put it into a stable coin USDC that eight percent. Why even go to a bank? Because then they can send it somewhere else instantaneously. You don't need to go to a bank when you want to buy a physical asset in the real world. But savings assets don't really need to be in the real-world. This is game-changing. Anybody who's complaining about I can't get enough interests of my savings, here's a worldview that's come out of defied that allows to do, what risks are you running? Well, it's not clear what all the risks are, but it's not clear what risks you're running in your pension fund. When your fund manager invest in corporate credit. You don't know what it is. But I do know there are invested in more junk bonds and they've ever done in history. As long as you spread your risks counts, then you probably going to be okay, because there's unlike to be catastrophic risk. There's going to be regulatory risk without question. But regulators only want to put this into their control, so they know there's no money laundering and you're paying your taxes, bog standard stuff. We see it everywhere, the narrative of, oh my God regulation, they're going to kill it. ******** everybody it's very clear when you see and speak to the regulators, that is not the case. It's very clear that this green narrative, it's dirty money, it's terrible. It's just a narrative they're spread, I think by the ECB to slow adoption. That's all okay, everyone's got their game to play in this. They want to get their digital currencies out, they want to be able to interact with this new system. But what they do, I mean ECP it talks about DeFi being a core part of this, and I think the US will tune, and it's already happening across Asia and China, I'll come on to that in a bit. DeFi all the lending that it wants to integrate with any financial. Why? Because the European banks are ******, so the Japanese banks. You can change all of that by using DeFi and central bank digital currencies, and then they're interoperable or connecting to offering to Bitcoin and all the cryptocurrency will, it's all there, it's all coming. This whole financial system that I've talked about is being built in front of our ******* eyes. People are still fighting it saying, "Well, Bitcoin is not a spirit risky," I mean, really, it's all happening. Everything you've ever wanted. All of you hate the Fed. All of you want gold. All of you who don't trust the equity market. It's all here. This world is coming at you fast. But there's more than that. The next big thing to come out. Who's in FTS? Here we go again, lot of teeth saying, they're a bubble. I don't think you even know what FTS are, if you think it's bubble, what they are, is a way of authenticating assets digitally. That is something the world needs because all of this Internet of value that's being built across Bitcoin, Ethereum and all the other protocols and elsewhere is all about trust. When you put something on an NFT, you're creating trust, and trust creates scarcity, and scarcity creates value. Now, this is where everybody gets NFTs from. They're like, "We can just put anything on an NFT, attach it to an NFT, and now it's valuable?" No. Some of that stuff is trading because there is proof of concept going on. Most of this stuff is worth zero but what people did was real. People's piece of art was groundbreaking. It was the digital journey of his artwork. Over 5,000 piece of art over 14 years. Which itself is extraordinary. That's sold for 69 million dollars as we all know, that's about 15 grand piece of art, actually not that valuable. But what it was, was a real artist that was acknowledged by the art world i.e people who want to put money into the asset as valuable, and that's great. It was actually outbid by not the art world but by somebody from the crypto space who also appreciate it and there's a good story behind that too. People's art was groundbreaking because this was as abhorrence to most people as, Damien Hirst and a shark in formaldehyde or Tracy Emin and that messy room or any of the modern wave of British artists. As abhorrence as Jackson ******* was with the spray paints his staff or Andy Warhol was. Everything that comes out of art that has real value is generally not considered to have value by the majority, they think it's ridiculous. How can a piece of digital stuff that can be replicated be worth anything? Interestingly enough, it's all about authentication. Photographs have value, original photographs that are signed by the photographer have real value. If you are in the negative that has even more value. A book that is printed has value, whatever value that is minimal. A book, a first edition of that book has rarity, it has more value. A first edition of that book signed by the author has more value. A first edition of a book signed by William Shakespeare has almost limitless value. It's the layers of rarity that come into it and NFTs do that. I'm really interested in the NFT space because it spreads. It's not just about art. Art is an easy way of looking at it and also by the way, just think about what painting is. My clients like painting that's worth millions, but this piece of art is rubbish. It's only digital. That's a piece of cotton canvas with some paint on it. Total cost, current price, product 50 bucks. Where you can trade it 500 million dollars and the premium is the price of the art and the authenticity and the rarity. Art is a very subjective market and what's nice for you or me is not nice for somebody else. That picture behind me is actually an NFT made by the two quant guys who developed the rotation bots that we see on religion a law. That's an FET that I printed it out and put it on my wall. Now is going to be worth anything? Not unless they become rich and famous or some other reason or the artist does. But it's commonly and it just shows that we can use NFTs. But NFTs are not just about that. NFT don't forget, is attaching scarcity and value and trust to an asset history. It can apply to real assets like wine, it can attach to real estate. We're all waiting for the growth of tokenized real estate and as securities laws change and come up to speed, we're going to see an explosion, my guess is the next cycle, we will see a massive change. Now, why should real estate be tokenized? Real estate should be tokenized because it stops just the rich people getting rich in the high-end real estate. Again, if you remember, because the monetary big deep basement and the fact that they get more money, they get to the invest in the more expensive property, which goes up more because there's more money in that space and everyone else gets left behind. But if you tokenize it, everybody can own a share. You can have the same percentage share of your net worth in it as a multi billionaire. That's groundbreaking. That's all of this digital space does that, it completely levels the playing field, so that pickle art interesting enough. There was another bunch of pickle art that was bought and then tokenized and then sold. I'll comes to that story a bit in the multiverse but that truly was groundbreaking because everybody can own it. One rich guy can own 69 million dollar piece and a bunch of ordinary people can own the rest. Phenomenal massive game change and is not like a reit. A reit has all sorts of linkedin **** in it. It's not a pure play, it's different. You actually physically have legal title of passwords with an NFT. But NFT is also game-changing for the music industry. If you see my conversations with people like RAC André. André is pioneering that. We've seen the Kings of Leon, we've a bunch of bands starting to realize that this is going to disrupt the middlemen in music. Eighty percent of all money in music goes to middleman not the artist, which is insane. We think bankers are egregious and what they take. Well in this, it's really all of the economics but when you can put your own things on the blockchain and sell them directly to your communities and FTEs, then you've got a direct relationship with your community and account communities a bit more in stack. But that's fascinating. What's more fascinating is the fact that you can then price scarcity for different people. If the bulk of your people will buy your album or stream it for free so you get paid virtually nothing from Spotify. Then there's the next here and currently, that's the people that go to concerts. Your concert tickets, 50 bucks, 100 bucks. You've got extracted more value from people because it's rarer because you get to see the artist physically. Then you might have a meet and greet which you paid more money for. That's basically all there is for artists and then the rest have to do by, whoring themselves out to brands. Here, I love Nike shoes. Really? What they've got is this massive community of millions of people. They can also provide rarer assets to them. In the case, for example, you could provide a single recording that nobody else has and give it to your super fan and it could be worth millions. You can monetize all across your fan base, much like most subscription-based businesses do. That creates revenue streams for musicians. They also can put that IP rights on, so as they move around they automatically accrue IP and you can sell baskets of IP rights. We're already seeing artists sell their bank catalogs but if you tokenize them and sell them, you could have part of the stream. Maybe maintain 20 percent, much like people has with art and some of these NFTs are without. It changes the economics and gets rid of middlemen. It just ekes out more for the actual people. That I think is really interesting. We're also seeing the rise of community tokens and people haven't quite seen this yet but this is coming and is going to be gigantic. There is a platform called socials, that has a conical chilis, which I don't own, but they have, built community tokens for big, soccer clubs, in Europe, AC Milan, FC Barcelona, a bunch of others. What as a fan you get, is a token, of which, you can get benefits. Something like, fan club benefits, including, voting for the what kit they wear. Some of the choices, so you're actually involved. Your community token has a meaning. Also has values. If the team does better, your token is worth better. You're part of the ecosystem, and it will give you benefits, like tickets and stuff like that. That, is the start of where this is going. Everybody, who monetizes online in any way, shape, or form is going to have a talk. Right now we use the subscription models. Right now, artists, for example, or influencers, have to leverage Google on Facebook, to basically monetize, and that's where brands themselves meet, and they, use advertising and other methods. But once you've got community, that has a token, and you have direct access to them, then you can monetize, in a number of ways, and create value for the community, or you can destroy value for the community, but that's for the community to be involved in, and you can share in successes. We're going to see this, from everybody, from sports stars, to YouTube channels, to actors and actresses, through to, charities, you name it. Anything where the community, is going to tokenize. It's going to unlock vast amounts of value. It's going to unlock ability for people to participate and feel part of something, of a society, which has its own form of money. The money can go up and down in value, or it maybe stable, it maybe utility and function, and that's okay, but you can't be parsed as such without it. But once you've got it, it means, the artist can speak to you directly, or the charity, or whatever. Community is going to be explosive. People like rally and stuff like that. People have no comprehension how large this is going to be. I think it's one of the largest, underpriced parts of the market, because people haven't got their heads around it. We haven't got our heads around insurance, and all of the other contingent stuff, betting, that all comes onto smart contracts. That hasn't really got off the ground, because we still want the palm of regulation. Regulation is so, ******* far behind, where it needs to get to. They're still trying to figure out what's the security are not, when the fact is you need to rewrite securities laws, because this has nothing to do with securities. This is a whole new asset class. In forth earning terms, we need a new infrastructure, new institutions, that I think it's coming. You can't launch central bank digital currencies, and then, not reinvent it. We're seeing Asia, much faster adopting, how this plays out. That's massively important, to rewrite all regulation from scratch, not shoehorn into stupid all regulation that requires endless court cases. Figure it out properly. I think the institutions, are keen to do that. It just takes time, and it's frustrating for businesses trying to build, at lightning speeds, when they don't really know they're going to get prosecuted for this or not. That's not right, when you're building something so incredible. But that's not all. All of that, fits into even something larger, which is, we are creating digital worlds, which we can call the metaverse. I urge you to watch the interview that I did with Piers Kicks, of Delphi Digital, about this. This is the world where, everything, is digitized. Barry Silbert launched all of this to us, really early when we started talking about central land. Within the digital worlds, there are three million gamers. Those gamers, live in an alternative world, where they socialize with each other. When I went to see a friend of mine, my old friend Darryl. I went to see him at his house, his son, Harry was playing. I think it was 4:09. I wasn't really aware of this, and he thought I was the biggest gamer in the world, but I wasn't really sure, why Harry on a Saturday, would be in a gaming chair, with the headphones on, on full light on a sunny day. I was like, "Wow, he's been added, he's played football, but now we socializing with his mate." I'm like, "What do you mean?" If we used to get to the shopping mall, and he's like, "Yes, well, they don't do that now." Because his friends are spread around. He said they do online. For some of you, you're like, "Obviously," and to the rest of you watching this, you're going to be, "What?" They hang out, and talk to each other, and play games together, and interact, and sort things, and trade things, with each other. Within these games, there is systems of money, tokens, earning a living, everything. That's one game, and there's many of these games. These games are becoming interoperable, where they connect with each other, and all digital universes. Those digital universes, have now money that can start spreading, from one to the other, so it can be baseline. Now bitcoin can do that too. But what we're seeing, is monetary systems, in this digital world, where these digital goods have value. I mean, swords in some of these games now have yield curves, because I want to lend my sword to you, and you're going to have to pay me for it, so you can get the experience of my level in a game, so the skins. Or renting the ability to play at different levels in games. There's so many variations. But it's not just about gaming, because, we're starting to see the rise of education, living in these digital verses. Results say income, businesses, real estate, all happening, there are digital architects, that are building digital projects, that have digital value, real value, that people are paying big money for. Let's go back to that people's story. The guy who bought the people, had also bought a bunch of the other people artwork, and increased the token, and he created, virtual art galleries, physical digital galleries, which you could visit to see the a lot, in various metaverses. Then he threw a party, on the launch of it, where people could go, listen to famous DJs, in different worlds, at parties, play an [inaudible]. You exploring this world, where you had to cross from one world to another. Then you go to another party, another art gallery, and so on, so forth. That's telling you where this is going. Digital art, is trading in additional gallery, with, live music, where in some cases, millions of people, about 20 million people attended, in some of these musical events, in the digital world, where people are meeting, exchanging value, conversing with each other, communicating, creating communities, earning money. That is growing at an exponential rate. Most of us don't see it because we're not Gen Z, but Gen Z are in it. Millennials seen age of it, but most haven't seen it, and it is coming. Universities and schools, they can all operate in this world. You can now go into a game, and play another game from a different, multiverse within a game. It's beyond my brain. When you put a VR headset on and an Oculus Rift, and the first thing you come into is that room, you're like," Oh my God, I can live in a garage and think I'm living in a beautiful house." That's just the start of where this is going. These technologies are exponentially growing. More people are being absorbed into the digital world. This whole thing is like the discovery of the Americas. There is an entire new world that has enormous potential. It is going to increase global GDP massively. It might even double it because of what is happening. We're not constrained in a digital world, but the same constraints of the physical world. In the world of universal basic income, people can earn money within these digital versus not creating something, but creating something for a digital company in digital world earning digital money. You can live in a digital house, but live in a impaired bedroom, I know that's what makes it sound sad and it's not supposed to be. That's just a dystopian version of this, but there's utopian sides of this too. This whole extra world. But I'm talking about, the Bitcoin life raft. It's not just a life raft, the Bitcoin, it's everything that we understand from value is moving and being built at a speed that none of us can comprehend. Nobody literally nobody can keep up with what is going on. It is sucking in all of the worlds talent, whether it's financial talent, development talent, philosophical talent, economics talent, everybody is going into this. We're creating opportunity to make money and invest at a rate of which has never been seen. I don't think in human history, I think this is the largest wealth distribution underway that has ever happened, and it's going to happen in such a short space of time, you can't get your head around it. The reason it's a short space of time is because we really ******* need it. Because this other system is destroying itself. But many of us, me included thought that this moment that we saw in March was going to be the big bang. Boom all over. How does it finish the end game? There is no endgame. The endgame is the ongoing destruction and the ongoing migration. We're all migrating across. But I know there's many of you feel like, "Raul I wish you just talk about Dollar, Yen and you know. I wish you go back to bonds or a traditional macro." This is traditional macro where it's going, everything is going here. It's almost irrelevant to talk about the bond market, but it's between 2 percent and 0. When you've got different yields and different assets all going on over here that are fairly priced without the influence of central banks. Why would you get involved? Why care if the dollar goes up 10 percent, when you can be involved in assets that do this, when they're all on exponential adoption curves, and there's new exciting technology? Why bother? Why does it matter what the price of oil does over the next nine months? It doesn't. That's the realization. That's why so many macro people have moved across. Macro is going to be useful as ever for hedging. Because all of this is still beholden to the world of business cycles, even though most business cycles now have been trodden out in terms of asset price effects because of the debasement of currency changing the denominator. But it will still have VAR shocks web everything implodes and goes down because there's too much leverage in the system, and the usual ******** that humans do, what we've just seen with [inaudible] , it's very common. A macro is great for hedging some of that stuff. But literally, I can't express to you how big this is and the opportunity. If we look at the traditional macro world of which I've now highlights it, I think there's a death of macro. I don't think currencies really move. I don't think bond yields really move. Not in terms of secular bet moves where we can make big money but following a career in a ship. That's done. What does it leave? It leaves equities, and it leaves crypto. We've just going to see more money. Yes, pick precautions as well. Credit, that's pin to the right. That's all gone. Credits is gone. Bonds have gone. Short-term rates have gone. FX training is gone, I mean, yes, emerging markets for function with equities and further out the risk curve. But really it's going to force more money, and more people to migrate into the source of returns. Now what's extraordinary is the Alpha that the space generates. The Alpha is like I've never seen before. Alpha in digital assets because there's so many of them, they're complicated. Everything's going under network affairs. People who are buying tokens who really understand it at generating massive returns at this point in the cycle, it is cyclical, they'll have points where their lives **** tons of money. But over time, because it's network effect, it doesn't revert to the mean, like silvered it off the 1980. It doesn't work like that. Exponential assets reverts to the exponential moving average, so it's always rising, which is what Bitcoins has done all the way through, Facebook's done, Google's done, all of these have done. Yes, these tokens, some of them will go to zero, but the whole token space, and these guys, they're going to have boom bust cycles and they will keep going up exponentially. There's also the trading firms, the trade crypto. Algorithm traders, short-term traders, macro guys, everybody. The amount of Alpha those guys are generating is unheard of. It will happen in the down cycle too, because they will capture some of the down cycle. There's money to be made all over this and every day there are more tokens, and these tokens are complex. It's hard to trade. That's even more Alpha for the people who figure it out. This space is going to be ongoing source of Alpha for decades when all real estates is tokenized and we can trade real estate when people are tokenized in terms of future careers or job parts or all parts from community tokens. When you can trade FC Barcelona or against AC Milan, community tokens and you can arbitrage it with something else. I mean, oh my God, you can't get your head around this. If we look at the traditional assets space which is dying. Equities, bonds, they're all credit. They're all 100, 200, and 300 trillion dollar markets. The crypto market's two trillion. It's a 100x from here. But I think it eats all of those assets over time. Maybe 200x, now we won't be a straight line. But this is the biggest change in financial markets. That system of money and economics and how economies are run in all of history in the fastest, shortest time it's ever happened. People are going to be tribal about, people who they can't hold up their own narratives to make sense of this world. But this world is unstoppable. It is coming, it will have massive boom bust cycles. Though we peer at somebody or lose money and pairs of times you'll feel like a god. But that is opportunity. Because in an exponential world, risk doesn't equal reward. Reward massively outside's risk, as long as you're not stupid about how you invest. I just thought it was important because it's simply the most important thing I've ever seen in my life and I keep talking about it, but I want to bring everything together to get it across how big this is and why I spend a lot of my time in this space. Because everything else seems dull. But in my journey of understanding and my migration to this other world, it gave me a new lens to understand the world we're in now, and the opportunities that are coming. I'm a big believer in Neil Howe and William Strauss' book, The Fourth Turning. I really do think we are in the fourth turning as we speak when new institutions, new forms of government, and new ways of doing things develop. They develop over 10, 15 year period. I think we're in the middle of that. I think with this digital revolution is clearly the most fourth turning figure on the planet. But I also think something else is happening. This is interesting to me because it's giving me optimism because the world is prefabs, we got the pension system. If it's broken he can't afford to pay the Baby Boomers and the Millennials hadn't been financialized. It's now have been financialized, starts to understand markets, but maybe not in the best way yet. We've got the debt burden. We've got too many people. We've got aging populations as well that are dragging on growth and the debt bubbles and all of this stuff. The stuff we know, the broken banking system, the rich, poor divide all the misery and shittery of the world around us. But Beacon give me hope that there was an answer.. My very first video about the pension crisis, several, this is the asset you actually need to buy and that proved out pretty **** good. But I'm starting to see that this is about to coincide with a bunch of other mega secular trends. I think we're entering what I'm referring to as the exponential age. It's going to be ignited by the stimulus that's coming. Because the stimulus has been pushed into areas to develop a new economy. Because people need to understand that the old economy can't generate GDP growth. Just simply can't, it's proven. GDP growth keeps rushing lower after every recession and lower. If we just did the same thing repeatedly this time around GDP growth should average about one percent. How do you change that? You change it by investing in technology. Week so happened to be at a point in time where more things have come together at the same point than ever before, and I realized this a while ago when I realized that Europe was hurtling towards a green future and what it was doing. I'm not going to talk about all this way too much to absorb and it's a whole conversation for another day. But it's something I wrote in, global macro investor. But right at the same time, we've got the revolution of digital value and money, the entire monetary system, the exchange of value, that store of value, everything, and the digital world within which we live. We've also got the EV and green energy revolution, the digitization of emerging markets, the Internet of things, virtual reality, wearable technology, biotech, 3D printing, autonomous vehicles, robots, AI distributed computing, 5 and 6G and space Wi-Fi, all rolling out in the next five years. Then that, is unbelievable. I don't think ever in history that all of these things get working now. But we're going to hit Metcalfe's law on every one of these in the next five years. Yes, there will be ups and downs and there will be bubbles and booms and busts. But we're going to see the largest group of things in an exponential trend than we've ever seen before. It's a new era. It's the exponential age, and it is going to be a golden age of opportunity. As we leave this old way of doing things, where we transition from the fourth turning into this new way. The new way is going to offer unprecedented opportunities to redistribute wealth. We're going to be there, I'm going to be there on this journey. I'm trying to get my head around all of this now. But hopefully I've given you the big damp, so you're all on the same page as me, with this whole digital world, the world of digital assets. Let's keep discovering more. It's all a journey of learning. None of us know what's going on. None of us know where it goes. All we know it's going there fast. I hope that was helpful everybody. Good luck and just keep adding into the depths because this thing is getting up. Welcome to the footnotes. As I said at the beginning, I wanted to add some extra bits onto the end, and I don't want to shoehorn it into the middle of the videos and you see these weird cuts. Again. This is really a free thought piece from me where I'm just dumping everything on my mind and I realize when I go on through it, there's a few things I really need to clarify or go into more detail of. The first thing, and I think is probably the single most important point I'm trying to get across at the beginning of this video, is this central bank debasement. We talk about changing the denominator because the denominator is falling, but I really go across clearly, or super clear, what that is. Now, you'll hear Michael Saylor talk about this too, and I think he does a good job, but still not quite clear. The actual thing is the central bank balance sheet since 2008, whether we're using the Fed or the G4 central bank balance sheets since the 2008 crisis started, they have been devaluing or increasing the balance sheets at about 15 percent a year and 13 percent after 2008 started. Because that was obviously going from a very small base, but essentialism move accordingly. But with the debasement, what we're trying to do is make sure our investment outperform that 15 percent fall in the denominator, either rise of the central bank balance sheets. We're now looking for a hurdle rate of 15 percent. Now, that's pretty tough even for the equity markets to do. Fifteen percent is pretty unheard of, but that's what we're looking for. When looking for assets that rise more than 15 percent or at least hold water versus that 15 percent, if not, we're actually getting poorer. This is this rich, poor design that I talk about because if you can't buy these assets that increased more than 15 percent, you're not generating wealth. You'll just keeping in line with the devaluation of currency. This is creating that 99 percent and the one percent divide is that inability to own the assets, to outperform debasement means you are not generating net wealth. Really important point. Also some other key points of observations about stuff happening within the space, I don't think I spent enough time talking about the interoperability layer. Now, how I describe this is, we started this whole crypto journey back in 2013 for me, at least with Bitcoin and then a theory in came. Then we've seen these other tokens, some have survived, some have failed, this big ecosystem. People say, "Well, this has got a great case for that. This has got a great case for this." Then this group o people saying, "Well, it's all going to go into one protocol." But a big development is people saying, you know what doesn't need to go one protocol and will build a layer that allows all of these things to work together. What this means is, I'm talking to you. I'm using a microphone of which you don't know what it is that condenses the sound and record it on a system that you don't know what it is. On a computer, you don't know it's a Mac or a PC. I'm using an Internet of which you don't know what the type of modem in it. You don't know any of these things and I can have a live call with you on a phone or I can have a Zoom call and you don't know or care. I can send you an e-mail, you don't know what system I'm all you just get the e-mail, that's interoperability. It's one of the key features of the Internet and what made the internet so successful. That is coming in crypto and it's coming fast. We've seen on real vision crypto, things like quantum network, Polkadots, chainlink. These things are huge because they allow different things to move around across this ecosystem. We're seeing in the gaming multiverse where a token go, or skin can get one game to the other, to the other and those are different languages, different protocols, some are blockchain, some art. It's extraordinarily exciting. The wave of the future is you're not going to know that some of these things are built on Bitcoin or Ethereum or anything else. What you care about is the end application and we're coming closer to that. In fact, NFT is one of those. Because really a lot that people, for example, buy in the NBA slam dunk shots, actually not interested in the fact that it's on a theory. All they care about is whatever protocol it happens to end up on. All they care about is the photo and the authenticator. That's a first time I've seen a real example of that. That leads me onto another story that I didn't cover in the video I alluded to is these lead to solutions. We are seeing, for example, some really interesting things on the lightning layer in Bitcoin which is using the Bitcoin protocol, but cars speeding it up. We've seen two big breakthroughs there. One was strike and the other is bottled pay. They're both slightly different. But what they doing is having lightning-fast payment rails, which is not about Bitcoin, it's actually me sending a dollar to you or sending you a euro and I started in dollars, and it happens instantaneously, it's payment rails. Obviously, there are many other protocols that are looking at the payment rails side, but it shows that Bitcoin can do that too and these things will be interoperable. Because don't forget we've got a big monster coming, which is Facebook deal, or the DNP Project and that means that on Facebook there's going to be a universe, which needs to be interoperable with everything else and the central bank digital currency is going to be interoperable. These layers, this interoperability, this is a really exciting development that I think people don't really yet know how this is all going to work, but it's coming and it's coming fast. I also didn't talk about remittances. I mean, this is another huge use case that's building rapidly people like Abra building out some really interesting stuff. The third world has been unbound and as I talked about in the video with hackling in a massive quantum leap into the digital world we're seeing in particularly in countries like India, but it's happening all across the world. Filipino remittances, it's a big market for the Philippines or down in Latin America. A lot of this is going on crypto rails. We've seen [inaudible] and Exxon pay with some of their use cases. We've seen that lightning is working on this. We've seen that people like Abra building wallets for this space. We're seeing a lot of focus on this. That's another game-changer. That's difference to all this other stuff. But it's going to change the world and that is ongoing and it's happening very fast and I think as people get connected to the Internet, but a 5G, 6G, and Starlink and all of the other satellite Wi-Fi. We're going to see some major changes in what it means to be banked globally. Also, I think that leads me onto another thing I didn't really talk about is we tend in the crypto world to be focused on the West, were very US-centric with a bit of Europe. In many marginal Europe, I mean is talked about like the West. But when you talk to people in Asia, you realize how incredibly advance the Asian crypto ecosystem is. I mean, all the volumes are really coming out of Asia. There's a bit of a wash trading between exchanges. But really what is happening is extraordinary things like a corporation in Malaysia that has currency restrictions, is trading with a company in China that has currency restrictions and then getting rounded to the bureaucracy, the slowness of that whole system and crossing the ringgit R&B cross-rate by actually doing it on Tether. Now, it doesn't have to be Tether but Tether is the standout winner in this area. trade payment rails are happening on stable coins. This is enormous. We don't really understand this in the West, but it is also happening at any other country-level where we're seeing this. That's where you get these weird countries that are using a lot of stable coins the narrative in the West is ours clearly. It's just capsule flights and money laundering and it's business doing business on a crypto solution, that is incredibly powerful. Also in Asia, retail and institutional investing is much more advance. the use of leverage, the sophistication of the Asian trader is by far in advance of where we are in the West because they're allowed to, the regulations allow them to do it. that's one of the big uses of Binance, Bitmax, FTT all in Asia. Because people understand how these products work. Koreans and others deeply understand selling purse to generate yield and the risks that involved because they've been doing it for decades as part of structured products. There's a structure products market that's developing there. We've had some videos and real vision about this. But I think it bears understanding how advanced this is all going on in Asia. How big these exchanges, why the volumes are so enormous. There's some real use cases and real understanding. Don't keep your eye off that ball either. Finally, the other thing I want to bring to people to understand is we're seeing a massive spike in, let's say, option trading in the stock market, speculative activity, activity in cryptocurrencies. These things are really dramatic in their shift. But I have been thinking about this and one of the things I realized is, if it was the same group of people and they had suddenly become more specular, speculative then that's different, that's a change in activity. But actually what we've done is the gigantic rise of the financialization of the millennial population. If you look at the massive growth in Robinhood, the massive growth in Coinbase, there's 56 million accounts that Coinbase is coming to market with and you see that globally, that is a younger population, that is just financialise. Why? Because the millennials like their parents have just hit that 30-year-old mark, 32 years old mark, where they need to get their sheets with ourselves saving. This recession we've had was the one and who knows why. But it was the one that brought them all into the financial markets. That step change in volumes and speculation and opening a brokerage account is not about an excessive speculative bubble building within an existing group of investors. It's new investors. Remember, when we go back to the story of inflation, the reason why we got the inflation in the 70s and 80s was this massive rise of the baby boomers going straight into this workforce and buying everything. As they first got their first wages that led to a massive rise in prices. Now, that doesn't happen as I talked about before in the inflation scenario with the millennials and the boom offsetting each other. But in the investment world, this is creating a huge new source of demand and it's very exciting for people like us at real vision. It's very exciting for the crypto industry. It's very exciting for the financial industry as everybody tries to catch up now and create the right product for the right world, which looks to me like it's a much more optimistic world. The reasons why Cathy's words arc invasive have done so well is because the young people are investing for the future and we're seeing it and we should encourage it. Anyway, thanks. I hope to put an else notes helps. I just wanted to get across some of these points and remember, we're all trying to offset that 15 percent number and that is why we're focused here. As the crypto market gets into the phase where let's say Central Bank printing slows down, the fades start tapering the global central bank's taper, the economy grows. We'll probably see that traditional crypto circle or crypto comes off and again, that point will be the startup searching for other assets that can offset that average 15 percent devaluation of fair currency. But anyway, thanks for your time, hope you found it useful. >> Hey, there, since you got to the end, I'm guessing you like the video and that's probably because we don't just turn on a camera and film. We worked really hard on getting the narrative flow just right and that's why many finance companies are actually now hiring real vision to make videos for them. One of our recent client videos just hit 100,000 organic views on YouTube and there were no kittens and site. If you want to find out how real vision can make a video for your company, just e-mail us at customvideo@realvision.com.