- Analyst Raoul Pal considers Ethereum to be the true money of the internet, ahead of Bitcoin.
- According to Raoul, Ethereum has the best risk-adjusted returns among all the cryptos.
- Raoul notes that other project tokens might perform better in the short-term, but Ethereum remains the most stable of them all.
Raoul Pal, a former hedge fund manager and co-founder of the financial media company Real Vision predicted that there could be massive upside volatility spikes for Ethereum in the future. He said this during a podcast uploaded on YouTube.
During the podcast, Raoul described Ethereum as the money of the internet. He believes that Ethereum is the most vibrant, deepest, and broadest ecosystem with the most institutional style adoption that most people understand.
Raoul explained that his basis for classifying blockchain goes beyond the performance of their tokens in the market. He said he is agnostic about which project posts the highest profit but remains focused on projects with the best risk-adjusted returns.
According to Raoul, he expects several projects to do better than Ethereum in a bull market. However, none of the other blockchains match its network effect. He noted that when it comes to the number of use cases, applications, number of wallet addresses, and velocity of money, no other network comes close to Ethereum.
Raoul singled out the recently launched ETH staking as a game changer for the Ethereum ecosystem. He noted that, unlike other staking protocols that restrict users’ access to liquidity, Ethereum’s Shanghai fork brings something different to the industry. It makes liquidity available to any staker at any time.
Analyzing this innovation, Raoul noted that it would create a money market curve for Ethereum that will provide the necessary financial liquidity to build things or stake such funds for staking rewards. According to him, the x-factor in this scenario is the ability to withdraw staked funds at any time instead of the mandatory fix with other platforms for long periods with uncertain market conditions.
Raoul identified the innovative burning mechanism introduced on the Ethereum network as a significant factor in the scheme of things. He thinks the scarcity of supply that it brings will enhance the growing value of ETH. That was reflected in the early stages of the recent crypto rally when ETH tokens slipped into negative issuance over a short period. With only 16% of ETH currently staked, Raoul thinks increasing this volume could cause massive upside volatility spikes that may be difficult to manage.
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