Lyn Alden and Raoul Pal: Is Ethereum a Good Investment? - Ep.211
Unchained
Intro
This chapter explores the investment potential of Ethereum in comparison to Bitcoin, analyzing their similarities in market behavior and adoption. The discussion highlights metrics like active wallets and price movements, suggesting that Ethereum's network effects could indicate a promising trajectory for its value.
Lyn Alden, CEO and founder of Lyn Alden Investment Strategies, and Raoul Pal, CEO & cofounder of Real Vision Group & Global Macro Investor, explain their thinking about Ethereum and its native token, and talk about their perspective on GameStop. In this episode, we discuss:
- why Raoul views ether as similar to bitcoin at a macro level (1:25)
- why Lyn decided ETH was not currently investable (5:06)
- an analysis of utility protocols (John Pfeffer’s paper) (6:55)
- counterarguments to John Pfeffer’s paper (9:31)
- how to allocate between BTC and ETH (11:22)
- why Raoul also invested in other coins beyond BTC and ETH (11:47)
- whether Metcalfe's law applies equally to all kinds of networks (13:35)
- why Lyn views Ethereum’s use case as circular, and why that makes it less investable (15:09)
- whether Ethereum 2.0 and Ethereum Improvement Proposal 1559, and whether that could make ETH more investable (21:20)
- the impact of fees on the value of Ethereum (23:36)
- Raoul's views on what S-Curves and the Lindy Effect indicate about the development of a currency (25:22)
- how high fees make DApps less attractive, while low fees potentially decrease demand for ETH (27:06)
- how Lyn believes demand for DeFi is to circumvent compliance and know-your-customer processes, and she doesn't also see that as a downside for Bitcoin (33:10)
- how the regulators are behind innovation in cryptocurrencies, particularly around taxation (36:32)
- Raoul's and Lyn's predictions for the ETH price by end of 2021 (41:45)
- what GameStop says about the democratization of financial information (45:32)
- whether smart contracts could play in preventing situations similar to what happened with GameStop and/or Robinhood (49:03)
- how blockchain technology could be used to prevent a situation in which the hedge funds could short more shares than existed (54:03)
- how the GameStop/Robinhood saga is a giant advertisement for self-custody (54:53)
- whether r/WallStreetBets' behavior was market manipulation or not (56:53)
Thank you to our sponsor!
Episode links:
Lyn Alden: https://twitter.com/LynAldenContact
Lyn Alden Investment: https://www.lynalden.com/
Raoul Pal: https://twitter.com/RaoulGMI
Real Vision: https://www.realvision.com/contributor/raoul-pal
Global Macro Investor: https://www.globalmacroinvestor.com
Raoul's tweet storm on Ethereum: https://twitter.com/RaoulGMI/status/1347013567799848961?s=20
Lyn Alden’s research paper on Ethereum: https://www.lynalden.com/ethereum-analysis/
Raoul Pal’s tweet: ETH equals BTC: https://twitter.com/raoulgmi/status/1347013567799848961?lang=en
John Pfeffer’s paper: https://s3.eu-west-2.amazonaws.com/john-pfeffer/An+Investor's+Take+on+Cryptoassets+v6.pdf
Network effects and Metcalfe’s Law: https://saylordotorg.github.io/text_developing-new-products-and-services/s04-12-there-is-power-in-numbers-netw.html
Quantity Theory of Money: https://saylordotorg.github.io/text_economics-theory-through-applications/s30-01-the-quantity-theory-of-money.html
How Will the Government React to GameStop?: https://www.coindesk.com/gamestop-regulators-response
GameStop and Crypto trading: https://cryptonews.com/exclusives/are-gamestop-style-surges-in-crypto-any-different-from-old-p-9151.htm
Robinhood Raises Extra funds: https://www.theblockcrypto.com/linked/93258/report-robinhood-billions-raised-investors-1
Possible role of blockchain in trading: https://cointelegraph.com/news/cardano-foundation-ceo-says-blockchain-could-prevent-gme-type-showdowns
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