Raoul Pal, former Goldman Sasch executive and CEO of Real Vision, smart contract platform wither (LEFT) and stablecoin focused blockchain payment system terraof (LUNA), he said, could follow the same parabolic price trajectory that Ethereum experienced in 2016.
Due to the cyclical nature of network effects, Pal said in a new interview with Real Vision. Ethereumclaims that it currently reflects Bitcoin’s 2017 bull cycle. The concept of network effect is the idea that the more users and participants in a system, the more valuable a good or service becomes. Metcalfe’s law is also used to measure the success of networks in the number of users.
“…As I began to explore Metcalfe’s law, I also began to realize that Ethereum exactly followed the last cycle of Bitcoin. And I think that, oh my God, it was kind of creepy. I mean, I have it on my Bloomberg in real time and it almost works, the graph is the same on a minute, day, weekly, monthly basis. I’ve never seen anything like this. This gives a $20,000 cycle projection for Ethereum and once again, I actually think this level will be surpassed.”
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The former Goldman Sachs executive says he later applied the same logic to Solana and Terra, projects launched after the 2017 bull market. According to Pal, both SOL and LUNA are following Ethereum’s first bull cycle.
“But I thought, if my reasoning about Metcalfe’s Law is correct, then these layer-1s, which we’ll talk about later, should also fit. And oddly enough, Solana vs Ethereum in the last cycle where Ethereum was the new breakthrough. It just follows. The same goes for Terra. It just follows.”
“But then I thought, if my reasoning about Metcalfe’s Law is correct, then it should also fit into these layer-1 projects, which we’ll discuss later. And oddly enough, here’s Solana vs Ethereum in the previous cycle where Ethereum was the new big breakthrough, everyone’s new darling. It totally follows. The same goes for Terra. It totally follows.”
The macro investor also says that even Bitcoin is following previous adoption cycles and he expects BTC to carry out the rest of its bull cycle similar to its first rallies in 2013. Pal says that for now, these network effects are the main driver of crypto markets.
“As these different protocols are adopted, they all start to behave the same. Bitcoin repeats the cycle of early mass adoption. So, with this similarity it is very interesting to me. And again, this [karşılaştırmaların] I don’t expect it to be perfect, but they contextualize network adoption…”
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