Source: "When Shift Happens", Youtube
Translation: Felix, PANews
Real Vision CEO Raoul Pal shared his framework for achieving success in crypto by 2026 without relying on luck: hold the right assets, then do nothing. Below are the highlights from the "When Shift Happens" podcast, translated by PANews.
Kevin: I recently went to Silicon Valley and talked to a lot of people, which made me even more convinced of the long-term perspective. We're going to discuss this today because I think it's important—people have to understand it, but they either don't get it or don't want to. A lot of people's frustration comes from a mismatch in time horizons.
Raoul Pal: It's as if you could tell them the direction of the future. The adoption of technology won't stop. The current market size has already reached over $3 trillion, and it will eventually reach $100 trillion. So we've only gone 3% of the way, and I estimate this could take 10 years. This is a long-term shift, but everyone keeps asking, "What about today?"
Kevin: How do you respond to trolls? I see people saying you always use "long-term vision" as an excuse, and when things go badly in the short term, you fall back on that. How do you respond to those people?
Raoul Pal: The short term is mostly noise, while the long term is driven by two key factors: network adoption and monetary debasement, making it more predictable. The short term always deviates from the long term, and people don't want to accept that. Everyone pins their hopes on the M2 chart. I say it won't match perfectly, but they interpret that as it always matching perfectly. As soon as there's a deviation, they say I'm wrong. As a macro analyst, my job is to figure out why there's a deviation, what's changed. For example, this time liquidity was drained by the Treasury General Account, plus the government shutdown. People don't get it—they think everything should match perfectly, but that's impossible. The short term is always much more noise than signal, and only by focusing on the long term can you see the signal clearly.
Kevin: I see a lot of smart people, especially former traditional finance traders, now saying the crypto market has matured, more institutions are coming in, and more professional traders are using AI and other technologies. So, apart from long-term investing, there's almost no alpha left in the market. Basically, what you can do is buy and hold like an ordinary investor or trader, betting on the long-term trend you mentioned.
Raoul Pal: I've seen this before. In 2004, that's why I left the hedge fund industry. In 2004, I was doing macro strategies. Macro strategies are more volatile and are long-term strategies because macro means you're essentially trading around macroeconomic and economic forces. Now, there's only one ISM data point per quarter, or one GDP data point per month. So, to really form a trend, you need a series of data over a period of time. That means at least a 6-month trading cycle, maybe shortened to 3 months at turning points, but usually it's 18 months to 3 years. That's the essence of macroeconomics.
Later, I realized that as new investors flooded into hedge funds, they forced everyone to mark to market monthly, and judged you by your monthly performance, not your annual performance or the return of a particular trade. No matter whether the stock you bought went up or down, as long as the price dropped that month—even if you were still profitable—you were supposed to close the position. I thought, you can't make money this way. This approach killed market volatility and reduced everyone's returns. Now, the crypto space faces the same problem. The macro space is even worse, because of the rise of system funds, high-frequency trading, etc., so macro lost its short-term trading edge. I left macro and founded Global Macro Investor (GMI) to prove that long-term investing is king.
Kevin: This is especially hard for a generation with ADHD (Attention Deficit Hyperactivity Disorder).
Raoul Pal: Right, everything feels like a video game to them.
Kevin: 2025 will be tough for crypto investors. Unless you invested in a few right tokens, returns are mediocre. Why?
Raoul Pal: Because of liquidity. Liquidity is currently the most important macro factor. It's a game. The first game is liquidity. The second game we overlay in crypto is: how is the adoption rate of the specific token asset you bought? Whether it's L1, L2, application layer, DeFi, or whatever, the key is the speed of adoption and the degree of depreciation. That's the whole game we're in. So people need to figure out the whole game. Then things get a bit complicated—how do you get liquidity?
In traditional crypto terms, liquidity refers to quantitative easing. They were printing money before, but now they've stopped. Then you have to figure out the Fed's net liquidity, which is the Treasury General Account and reverse repo operations. This used to be the only source of liquidity in the system, but they've run out of reverse repo funds. The Treasury General Account is like a checking account—they keep topping it up and draining it, so the balance fluctuates. In reality, it doesn't help liquidity. The liquidity we see is actually the depletion of reverse repo funds. So the rate of change in liquidity has been very low. That's one factor.
Also, the cycle has lengthened. Some say there's a four-year cycle, and that's true, but there's a reason. After 2008, interest rates went to zero, and countries planned debt for 3-5 years, rolling it over every four years. In 2021-2022, rates went to zero again, and they extended debt duration to 5 years. So what should have been printed in the fourth year is pushed to the fifth year, which is 2026. $10 trillion in debt needs to move, so 2026 is when big liquidity is needed. But now there are too many tokens, and liquidity can't save every project. In the past, anything you bought would go up, but not anymore.
Kevin: Right, even with more liquidity, many tokens will still lose people money because they're bad investments.
Raoul Pal: Exactly, no one uses them. A few can become memes, but it's hard for them to last. What people don't understand is that there's a risk curve even among mainstream tokens: bitcoin pulls back 30%, ethereum 40%, solana 50%, SUI 60-65%, depending on their maturity, user numbers, and market depth. The core of my "DTFU" (Don't Fuck This Up) framework is not to make the most money, but to avoid losing too much, then compound over the long term. It sounds boring, but that's the truth."
Kevin: "What does a 'minimum regret portfolio' mean?"
Raoul Pal: It means you won't look back and think you were an idiot. L1 is the simplest—big enough, adopted enough, won't go to zero in one cycle. It may "bleed" slowly, but won't go to zero instantly. Then you need to check if you're just blindly following the crowd. Now ChatGPT is free, you can check on-chain metrics, user growth, etc.
Kevin: Is ChatGPT reliable for analyzing on-chain metrics?
Raoul Pal: I wrote an article about Metastas last week, using stablecoin transfer value/active users for valuation. ChatGPT itself suggested using five metrics—DeFi, gaming, etc.—to define active users, then ranked chains based on those metrics to see which are overvalued or undervalued. It gives you a pretty good judgment and does well in almost every aspect. It's also good at interpreting technical charts. You can give it a chart and ask for its view, and it'll give you a decent result.
Kevin: Do you follow your own "DTFU" investment framework?
Raoul Pal: I basically follow it, but my positions are more concentrated. When people hear I'm concentrated, they think they should be too. I'm concentrated because I built my own valuation model. It's likely to change at some point. It's more volatile—it's designed to be more volatile because it's an early network adoption model. So its downside volatility is greater than its upside volatility.
In the past two weeks, I've been selling tokens like crazy, and suddenly this morning I woke up to SUI up 20-30%, others up 8%. I can accept it, but others may not understand. Besides that, I have other businesses that generate cash flow, which allows me to allocate assets correctly, and I take on more risk because I've done more homework. But that doesn't mean my judgment is always right. Others shouldn't follow my asset allocation advice—they should follow the overall trading principles. Never borrow someone else's conviction. That's the most important thing.
Kevin: Is it possible for you to underperform people who follow your "DTFU" advice?
Raoul Pal: Of course. I'm only responsible for my own capital. If I'm wrong, I bear it myself. As long as my general direction is right, that's enough.
Kevin: I saw a tweet: a girlfriend started DCA-ing into ETH and BTC in 2019, doesn't look at Twitter or pay attention, and has outperformed her boyfriend by a lot. The best-performing brokerage accounts are often those of "deceased" clients.
Raoul Pal: Yes. So we always come back to the basics. Most people are in pain now because they're stagnant or losing money this cycle, since they didn't buy heavily at the bottom—which is hard to do. The simplest way to get rich is to always DCA into BTC, which outperforms DCA into the S&P 500. But that's not the real way to make money in crypto. I think a better way is to DCA when the market drops X% —say, 30% or more—then invest at three times the frequency when the market hits new highs. That way, your compounding returns will definitely be better. It's not hard to do.
Kevin: Psychologically, it's hard. I buy bitcoin every month, always thinking it'll go up, but I end up buying at local tops.
Raoul Pal: I bought SUI three weeks ago, then it dropped a lot. But over time, you'll forget your entry price unless it was the absolute bottom.
Kevin: Do you collect tweets that insult you?
Raoul Pal: No, but I read tweets insulting me on my show Drinks with Raoul. It's good therapy. It also reminds me where I wasn't clear.
Kevin: Many early believers from 2017-2021 have now moved to AI, saying crypto hasn't delivered on its decentralization promise, and all that's left is ETF and stablecoins—very disappointing. But I think it's really because they haven't made quick money in recent years, and have lost their edge. In Silicon Valley, it's the opposite—they say the big returns are still ahead. Electric Capital's Aishal compares crypto to a more liquid form of venture capital. Most VC bets go to zero, a few make a lot, but you have to hold forever because exponential things end up at unimaginable scale.
Raoul Pal: VCs get in before tokens are generated, at lower valuations. In public markets, the power law isn't as strong—price matters more. Last cycle, I tried a broad portfolio, but most returns still came from ETH, BTC, and a bit of Solana—the rest were basically useless. Now the market is about $3.5 trillion; conservatively, in 10 years it'll be $100 trillion, so we're only at 3%. Bitcoin dominance will decline, smart contract dominance will rise because of more use cases. The whole market still has 30 times upside potential.
Kevin: Silicon Valley understands exponentials, Wall Street understands linear and mean reversion. So every bull and bear market, they think it's over. But if you zoom out, it's a smooth trend. Amazon, Google, Tesla are the same. Big volatility early, smaller as they mature. What's your portfolio like now?
Raoul Pal: Other than buying some SUI three weeks ago, nothing else has changed. Bought some NFTs. People will screenshot and say I'm shilling SUI, then someone will call me a scammer. My allocation is my business. I beg you not to copy my risk appetite. I just want to say, base it on your own risk tolerance.
Kevin: What's your real view on SUI by the end of 2025?
Raoul Pal: It's performing normally on the risk curve. Short-term, it's underperformed Solana but is still in an uptrend. The project's tech is fine—the key is whether it can get adoption. User growth is faster than Solana last cycle, value/active user is high. The model shows it's about 80% undervalued compared to Solana. Still needs a broader market rally to confirm.
Kevin: How do you allocate your income each month now?
Raoul Pal: Cash flow goes to investments, living expenses, and various costs—just like everything else. Besides crypto, I invest in other things, like a lot of digital art. As your capital grows, you'll want to upgrade some things. So you'll change your speakers, your car, etc. You do this to maintain your asset quality, because if you don't, your asset quality will decline over time—cars break down, age, become annoying, need constant repairs.
I like to spend money on vacations and travel. That's quality of life. Quality of life itself is an investment—it gives you experiences. So I put a lot into that.
Kevin: You mentioned digital art, meaning NFTs. How are NFTs doing now?
Raoul Pal: Art Basel is happening, and half the digital art market is there. Although much of the art they create isn't actually digital. The situation now is, once ETH or Solana prices reach the upper end of the range, sales explode again because people start recycling wealth to buy art. When prices fall to the bottom of the range, no one has money to buy, because the opportunity cost of putting liquid funds into non-monetary assets drops. But this argument shows that whenever prices peak, art becomes the focus and prices start hitting new highs.
We're already seeing some big investors enter the space. Nikki Mala from Ribbit Capital acquired the Punks IP and Crypto Punks IP; other investors like Alan Howard are also big in this space. The overall value of art is rising, but it still fluctuates with crypto prices. So prices may dip slightly, but in the long run, they often outperform the market, and more things will emerge in this field.
Kevin: Animoka co-founder Yuge Yatsu recently said NFTs are the asset class of this generation. I think most people would say, "What the hell? Is he deluding himself? Is he denying reality?" I want to ask, does he understand something most people still don't?
Raoul Pal: Yes. Everyone thinks things like Monkey JPEGs have depreciated. It's really stupid speculation. People don't realize that crypto is highly speculative, and this high speculation accelerates the validation of certain ideas. And speculation has proven that the value of digital assets isn't just in being exchange tokens. So we have Crypto Punks, with a total value of $10 billion. Game assets, ticketing, financial contracts, digital identity... the TAM is huge. The most valuable block space is art. In the digital world, everything can go to zero except digital scarcity. Wealth ultimately flows to art.
Kevin: You posted in early November saying "bottom in"—is that still your advice now, in December 2025?
Raoul Pal: Yes. I think the market has already bottomed. So we went through the October liquidation. The US government withdrew liquidity via the Treasury General Account, then shut down the government, so now there's no liquidity because they can't even use the Treasury General Account. Crypto, as the most liquidity-sensitive asset, saw its liquidity collapse, exposing all the weaknesses of leverage and triggering a series of systemic leverage liquidations and other issues.
If all my research on liquidity is correct, a wave of liquidity is coming. The system now tells us the banking system is tight on funds, leading to frequent money market volatility. There's not enough money in the market. The Fed knows this too. They've stopped quantitative tightening. But they have another task—to finish year-end financing. Banks don't have enough liquidity to roll over debt and adjust balance sheets. So the Fed has to inject some liquidity.
Kevin: How do you get rich in crypto in 2026?
Raoul Pal: Hold the right assets and do nothing. Don't borrow others' conviction—do your own homework and build your own conviction. Set your time frame based on your risk tolerance and goals. My framework is a 5-year cycle; everything else is noise.
Kevin: What's something you hold onto but know you should let go?
Raoul Pal: Thinking I can help more people. But I have to let go, because some people don't want help. It's frustrating. You're trying hard to help everyone, but many people are trying hard not to be helped.
Kevin: When you wake up in the morning and before you go to bed at night, what does the voice in your head say?
Raoul Pal: Keep going. My job is to live in the future and see the path. Don't worry too much about trivialities. As long as the big direction is right, that's enough. Don't care if SUI drops 30% this week—care that the whole market will reach $100 trillion.
Related reading: Conversation with Polygon Founder: Escaping Poverty and Building a $30 Billion Crypto Company
