Interview with Real Vision CEO: How to Succeed in the Encryption Field by 2026 Without Relying on Luck

Source: “When Shift Happens”, Youtube

Compiled by: Felix, PANews

Real Vision CEO Raoul Pal shared his framework for achieving success in the cryptocurrency space by 2026 without relying on luck: hold the right assets and then do nothing. Below are the highlights from the interview on the podcast “When Shift Happens” compiled by PANews.

Kevin**:** I recently went to Silicon Valley and talked to many people, which strengthened my long-term perspective. Today we need to discuss this because I think it is important; people must understand it, but either they do not understand or they do not want to understand. A lot of people's anger is due to mismatched time spans.

Raoul Pal**: **It's as if you can tell them the direction of future developments. The proliferation of technology will not stop; the current market size has already reached over $30 trillion and will ultimately reach $100 **trillion. So, we have only gone ** **3%****, and I estimate this may take ** 10 years. This is a long-term transformation, but everyone will ask, “What about today?”.

Kevin**:** How would you respond to trolls? I saw someone say that you often use “looking at the long term” as an excuse, and when things are not good in the short term, you bring this up. How would you respond to such people?

Raoul Pal**: ** In the short term, it's mostly noise, but in the long term, it's driven by two key factors: adoption by the network and excessive money supply, making it more predictable. The short term will always deviate from the long term, which people do not want to accept. Everyone is pinning their hopes on the M2 chart, but I say it won't match perfectly, and yet people interpret that as it always matching perfectly. The moment it deviates, they say I'm wrong. My job as a macro analyst is to understand why deviations occur and what has changed. For example, this time liquidity was drawn away by the Treasury's general account, coupled with the government shutdown. People don't understand and think everything should match perfectly, but it’s impossible. In the short term, noise always far exceeds the signal, and only by focusing on the long term can we see the signal clearly.

Kevin**:** I see a lot of smart people, especially former traditional finance traders, who now say that the crypto market has matured, with more and more institutions and professional traders using technologies like AI. Besides long-term investment, there is almost no alpha in the market anymore, so what you can do is basically buy and hold like a regular investor or trader, betting on the long-term trend you mentioned.

Raoul Pal**:** I have seen this kind of situation before. In 2004, I left the hedge fund industry for this reason. In 2004, I was focused on macro strategies. Macro strategies are more volatile and are long-term strategies because macro strategies essentially mean you are trading around macroeconomic factors and economic forces. Now, there is only one ISM data per quarter, or one GDP data per month. So, to really form a trend, you need a series of data over a period of time. That is to say, at least a trading cycle of 6 months, or maybe it can be shortened to 3 months at a turning point, but in reality, it is usually 18 months to 3 years. That is the essence of macroeconomics.

Later I realized that with new investors pouring into the hedge fund investment space, they forced everyone to mark to market on a monthly basis, and your evaluation was based on how much the price fluctuated that month, rather than how you performed over the year, or how profitable the trade was. No matter whether the stocks you bought went up or down, as long as the price dropped during the month and you were still profitable, you were supposed to close your position. I thought at the time that you couldn’t make money this way. This practice stifled market volatility and reduced everyone's returns. Today, the crypto space faces the same issues. The situation in the macroeconomic field is even worse, as the rise of system funds and high-frequency trading has caused macroeconomics to lose its advantage in short-term trading. I left macroeconomics and founded Global Macro Investor (GMI) to prove that long-term investment is the way to go.

Kevin**：** This is especially difficult for a generation with ADHD (Attention Deficit Hyperactivity Disorder).

Raoul Pal**: ** Yes, they feel like everything is a video game.

Kevin**:** 2025 will be quite difficult for crypto investors; unless you've invested in a few correct tokens, the returns will be mediocre. Why?

Raoul Pal**: ** Because of liquidity. Liquidity is the most important macro factor right now. It's a game. The first game is liquidity. The second game we overlay in the crypto space is how well the specific token asset you buy is adopted. Whether it's L1, L2, application layer, DeFi, or anything else, the key is the speed of adoption and the extent of depreciation. This is the entirety of the game we are in. So people need to figure out the whole of this game. Then things get a bit complicated, how to obtain liquidity?

In traditional cryptocurrency terminology, liquidity refers to quantitative easing. It had been printing money, but now it has stopped. Then you have to figure out the net liquidity of the Federal Reserve, which is the Treasury's general account and reverse repurchase operations. This used to be the only source of liquidity in the system, but they have exhausted the reverse repurchase funds. The Treasury general account is like a checking account, and they keep replenishing, emptying, replenishing, and emptying it. So the balance of this account keeps fluctuating. In fact, it does not help with liquidity. The liquidity we see is actually the depletion of reverse repurchase funds. Therefore, the rate of change in liquidity has been very low. This is one of the factors.

Moreover, the cycle has been extended. Some say there will be a four-year cycle, and indeed it is true. But there is a reason for this. After 2008, interest rates went to zero, and countries planned their debt for a duration of 3-5 years, with debt rollovers occurring every four years. In 2021-2022, interest rates went to zero again, and they extended the debt duration to 5 years. So the place where money was originally supposed to be printed in the fourth year has been pushed to the fifth year, which is 2026. 10 trillion in debt needs to flow, so a large liquidity event is needed in 2026. However, there are too many tokens now, and liquidity cannot save all projects. In the past, anything bought would rise, but now it doesn't work.

Kevin**: ** Yes, many tokens can have plenty of liquidity but still cause people to lose money because they are poor investments.

Raoul Pal**: ** Yes, no one is using it. A few can become memes, but it's hard to last. What people don't understand is that there are also risk curves among mainstream tokens: Bitcoin pulls back 30%, Ethereum pulls back 40%, Solana pulls back 50%, and SUI pulls back 60-65%, depending on their maturity, user base, and market depth. The core of the “DTFU”** (Don’t Fuck This Up) framework I use is not to make the most money, but to not lose too much, and then compound in the long run. **It sounds boring, but that's the truth.

Kevin: What does “minimum regret portfolio” mean?

Raoul Pal**: ** Looking back, you won't feel foolish. L1 is the simplest, has a large enough volume, and is adopted; it won't go to zero in one cycle. **Although it may slowly “bleed,” it won't instantly go to zero. Then you need to check whether you are blindly following the trend. Now that ChatGPT is free, you can check on-chain metrics, user growth, and other situations.

Kevin**:** Is ChatGPT's analysis of on-chain metrics reliable?

Raoul Pal: I wrote an article about Metastas last week, using stablecoin transactions value / active users for valuation. ChatGPT itself suggested defining active users with five indicators such as DeFi and gaming, and then ranking chains based on these indicators to see which chains are overvalued and which are undervalued. It can give you quite a good judgment, as it performs well in almost all aspects. It is also very good at interpreting technical charts. You can give it a chart, ask how it views it, and it will give you a good result.

Kevin**:** Do you follow your own “DTFU” investment framework?

Raoul Pal**:** I basically adhere to it, but my positions are more concentrated. When people hear that I am concentrated, they feel they should concentrate as well. I am concentrated because I have built a valuation model. It is likely to change at some point. Its volatility is larger; it is designed for greater volatility because it is an early network adoption model. Therefore, its downside volatility is greater than its upside volatility.

In the past two weeks, I sold tokens wildly, and suddenly this morning I woke up to see SUI up 20-30%, and others up 8%. I can accept it, but others may not understand. In addition, I have other businesses that can generate cash flow, which allows me to allocate assets correctly, and I take on greater risks because I did more homework. But that doesn't mean my judgment is necessarily correct. Others should not listen to my asset allocation advice; they should follow the overall trading principles. Never borrow someone else's beliefs. This is the most important thing.

Kevin**:** Are you at risk of underperforming compared to those who follow your “DTFU” advice?

Raoul Pal**: ** Of course. I am solely responsible for my own capital. If I am wrong, I bear it myself. As long as my direction is roughly correct.

Kevin**:** I saw a tweet: My girlfriend started dollar-cost averaging into ETH and BTC from 2019, not checking Twitter or paying attention, and she significantly outperformed her boyfriend. The clients who perform the best in brokerage accounts are often the “deceased” ones.

Raoul Pal**: Yes. So we always return to the starting point. Now most people are in pain because they are either stagnating or losing money in this cycle because they didn't buy in large amounts at the lows, which is hard to do. The easiest way to get rich is to always dollar-cost average BTC,** which has better returns than dollar-cost averaging the S&P 500. But this isn't really the way to make money in crypto, I think a better approach is to wait until the market drops X% to do dollar-cost averaging, like a drop of 30% or more, and then invest three times as frequently as when the market hits new highs, this way the compounding returns will definitely be better. It's not hard to do.

Kevin**: **It's psychologically difficult. I buy Bitcoin every month, always feeling like it's more likely to rise, but I end up buying at local tops.

Raoul Pal**: **I bought ** SUI three weeks ago, **and then it dropped a lot. But over time, you forget the entry price, unless it's a major bottom.

Kevin**:** Do you have any collected tweets that insult you?

Raoul Pal**:** No, but I read the tweets criticizing me on the Drinks with Raoul show. It's quite good therapy. It also reminds me where I wasn't clear.

Kevin**:** Many early believers who entered between 2017 and 2021 have now shifted to AI, claiming that cryptocurrency has failed to deliver on its promise of decentralization, only offering ETFs and stablecoins, which is very disappointing. But I think they are actually just frustrated because they haven't made quick money in recent years and no longer have an advantage. In Silicon Valley, it's the complete opposite; they say the big returns are still ahead. Aishal from Electric Capital compares cryptocurrency to a more liquid form of venture capital. Most venture capital investments will go to zero, but a few will be very profitable, and you have to hold onto them forever because exponential things ultimately scale beyond imagination.

Raoul Pal**: ** Venture capital enters before token generation, with lower valuations. Buying on the open market, the power law is not as strong, and price is very important. In the last round, I tried a broad investment portfolio, and most of the returns still came from ETH, BTC, and a bit of Solana, with others being basically useless. The current market size is about $3.5 trillion, conservatively estimated to reach $100 trillion in 10 years, and we're only at 3% now. Bitcoin's dominance will decline, while smart contract dominance will rise, as its use cases will increase. The entire market still has 30 times potential for growth.

Kevin**: ** Silicon Valley understands exponential growth, while Wall Street understands linearity and mean reversion. So every time there’s a bull or bear market, they think the market is finished. In fact, looking at it over a longer period, it's just a smoothed trend. Amazon, Google, and Tesla are all the same. In the early stages, there are large fluctuations, which become smaller as they mature. What does your investment portfolio look like now?

Raoul Pal**: ** Other than buying some SUI three weeks ago, I haven't done much else. I bought some NFTs. People will screenshot this and say I'm promoting SUI, and then someone will call me a scammer. My allocation is my own business. I'm asking you not to follow my risk preferences. I just want to say to act according to your own risk tolerance.

Kevin**: ** What is your true opinion on SUI by the end of 2025?

Raoul Pal**:** It is performing normally on the risk curve. It has underperformed Solana in the short term but is still in an upward trend. The project's technology is sound; the key is whether it can achieve adoption. The user growth rate is faster than the last round of Solana, with a high value/active user ratio. The model indicates it is undervalued by about 80% compared to Solana. A general market increase is still needed for validation.

Kevin**: **How to allocate your income each month now?

Raoul Pal**:** Cash flow will be used for investments, living expenses, and various costs. Just like everything else. Besides cryptocurrencies, I also invest in other things, such as a large amount of digital art. As your funds grow, you will want to upgrade some things. So you will change speakers, change cars, etc. You do this to maintain the quality of your assets, because if you don’t, the quality of your assets will decline over time, such as cars breaking down, aging, becoming a hassle, and needing constant repairs.

I like to spend money on vacations and travel. This is the quality of life. Quality of life itself is an investment that can bring you experiences. So, I have invested a lot in this area.

Kevin**: **You mentioned digital art, which is NFT. How is NFT doing now?

Raoul Pal**:** The Basel Art Fair is ongoing, and half of the digital art market is there. Although many of the artworks they create are not actually digital. The situation now is that once the price of ETH or Solana reaches the upper limit of the range, sales will explode again as people start to recycle wealth to buy art. When the price falls back to the bottom of the range, no one has money to buy because the opportunity cost of putting liquid funds into non-monetary assets decreases. But this argument suggests that whenever the price peaks, artworks become the focus, and prices begin to hit new highs.

We are starting to see some big-name investors enter this field. Nikki Mala from Ribbit Capital acquired Punks IP and Crypto Punks IP; there are also other investors like Alan Howard, who is a major investor in this area. The overall value of artworks is rising, but it will still fluctuate with the price of cryptocurrencies. So prices may slightly decline, but in the long run, it often outperforms the market, and more things will emerge in this field.

Kevin**：** Animoka co-founder Yuge Yatsu recently stated that NFTs are the asset class of this generation. I think most people would think, “What the heck? Is he fooling himself? Is he denying reality?” What I want to ask is, does he understand something that most people still do not?

Raoul Pal: Yes. Everyone thinks that things like Monkey JPEG have depreciated. It's really foolish speculative behavior. People do not realize that the speculation in cryptocurrency is extremely strong, which accelerates the validation of certain ideas in a highly speculative manner. And speculation has proven that the value of digital assets is not just in being tokens of exchanges. So, we have Crypto Punks, which have a total value of 10 billion dollars. Game assets, ticketing, financial contracts, digital identity… the TAM is huge. The most expensive block space is art. Everything in the digital world can go to zero, but only digital scarcity retains value. Wealth will ultimately flow towards art.

Kevin**: ** You posted in early November saying “buy the dip”, is that still the advice now that it's December 2025?

Raoul Pal**: ** Yes. I think the market has bottomed out. So we went through the liquidation in October. The US government extracted liquidity through the Treasury General Account, and then they shut down the government, and now the liquidity is gone because they can't even tap into the Treasury General Account. Cryptocurrency, as the most liquidity-sensitive asset, saw its liquidity plummet, exposing all the weaknesses of leverage and triggering a series of issues such as systemic liquidation of leverage.

If all my research on liquidity is correct, a wave of liquidity influx is about to occur. The system currently tells us that the banking system is experiencing tight funding, which leads to frequent fluctuations in the money market. There is a shortage of funds in the market. The Federal Reserve is aware of this as well. They have stopped quantitative tightening. However, they have another task, which is to complete the financing work by the end of the year. Banks do not have enough liquidity to roll over debts and make balance sheet adjustments. Therefore, the Federal Reserve must inject some liquidity.

Kevin**: ** How to get rich in cryptocurrency by 2026?

Raoul Pal**: ** Hold the right assets and do nothing. Don't borrow the beliefs of others, do your own homework and establish your own convictions. Set time frames based on risk tolerance and goals. My framework is a 5-year cycle; everything else is noise.

Kevin**: ** What is it that you hold onto but know you should let go of?

Raoul Pal**: ** Feels like he can help more people. But has to let go, because some people don't want help. It's frustrating. You're also desperately trying to help everyone, but many people are fighting hard not to be helped.

Kevin**:** What do you hear in your mind every morning when you wake up and every night before you sleep?

Raoul Pal**: ** Keep moving. My job is to live in the future and see the path clearly. Don't worry too much about the details. As long as the big direction is right. Don't care that SUI dropped 30% this week, care that the entire market will reach 1 trillion dollars.

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