Macro guru Raoul Pal says that network effects are causing the entire crypto space to explode at an extraordinary rate.
In a new video, Pal reasons that the explosion of interest in the crypto markets becomes a lot clearer when one takes into account the power of network effects, or the idea that the more users and participants a system has, the more valuable a good or service it is.
Pal notes that Ethereum and Bitcoin’s price trajectory looks almost identical when tracked from the moment they both had five million active wallets using the network, suggesting network effects are the key drivers of price and value.
“Their prices were identical, and the chart patterns are identical, but they’re about four years different. I was like, ‘Whoa.’ So these are being valued exactly the same at different points because it’s only the network effect that’s valuing them. That was an incredibly exciting discovery and I realized that the