Ari Paul: Discerning the Phases of a Crypto Bull Market

Published on
December 22nd, 2020
Duration
79 minutes

Olaf Carlson-Wee – “The Greatest Wealth Transfer of Our Lifetimes”


Ari Paul: Discerning the Phases of a Crypto Bull Market

The Interview - Crypto ·
Featuring Ari Paul and Raoul Pal

Published on: December 22nd, 2020 • Duration: 79 minutes

Ari Paul, CIO & managing partner of BlockTower Capital, joins Real Vision CEO Raoul Pal to discuss the launch of Paul's fund, value accrual in the crypto space, and how far along we are in this crypto bull market. Paul explains how he views the risk curve and how he filters through crypto projects. He describes the importance of understanding timing in the markets and how he believes crypto markets have dramatically more alpha in them than traditional markets. He closes by discussing the recent regulatory attention that the crypto space has received. Filmed on December 10, 2020. Key Learnings: Paul explains the game theoretical concerns of crypto hard forks and how minority chains are insecure. He believes, "We are only in the 4th inning of this bull market cycle." Paul and Pal state that there is significantly more alpha to be found in crypto markets over traditional markets, and they expect it to remain this way for the foreseeable future.

Comments

Transcript

  • IO
    Indi O.
    5 January 2021 @ 19:38
    Great conversation, but it always surprises me how few people know that there are already atomic swaps on Stellar Lumens XLM. On any of its DEXs I can have say ETH and be sending value to someone who only wants say BTC. In a single transaction I can send my ETH and have them receive BTC. It's done with what's called a Path Payment which is a native part of how XLM chain functions. And it all happens for a fee that's a fraction of an XLM, and in maybe a minute. Now it doesn't work within a smart contract's functioning! You can't run an ETH contract using BTC, for example. But at least for payment there is currently atomic swaps. For deeper functioning, I look hopefully toward projects like Polkadot DOT. Just wanted to insert that, because the implication when atomic swaps was discussed was that it was a future "nice to have," when really it's available now in certain contexts. Very instructive conversation though. I'm also looking forward to seeing more use cases built on Matic. ETH fees are madness. I'm eager to see DEFI move to some other chain entirely, really. Reduced security won't work for DEFI or even NFTs. But ETH just can't natively handle the volume that wants to participate on it, and ETH2 is probably years from taking its place. I refuse to even buy NFTs minted on ETH. I'll take them from any other chain. How people put up with this, I don't understand. You think DEFI is catching on fast now? Wait until we are no longer confined by the pitiful ETH throughput bottleneck. I'm willing to give up a little alpha for fewer grey hairs.
  • TS
    Thomas S.
    24 December 2020 @ 23:10
    Around the 40 min mark Ari says something to the effect that DeFi investments should be viewed as hyper-speculative and would invest there if not getting 40%+ returns. What exactly is he referring to ? Investing in the coins themselves, using the Dapps to earn yield, lend or borrow, or other ?
    • TS
      Thomas S.
      24 December 2020 @ 23:11
      "would not" invest .....
    • TS
      Thomas S.
      24 December 2020 @ 23:54
      here is the specific context .... " And there's obviously been a lot of problems with DeFi. There have been constant hacks. I would strongly advise basically anyone against viewing DeFi as anything other than hyper-speculative in the sense that, sure, maybe it makes sense to be a staker or provide liquidity if you're hoping for a 40% return, let's say-- you wouldn't touch DeFi smart contracts for a 4% yield, right? The riskadjusted return would be terrible. "
    • IO
      Indi O.
      5 January 2021 @ 18:07
      I used to be a liquidity provider. It cost me about $100 each way moving in and out of contracts (gas fees), and I faced smart contract risk. If I had earned a 5% return for doing that, I would have been better off buying any number of POS coins and staking them from my own self-custodied wallet for the same 5%. Actually I earned more like 30% in just 4 months, for an annualized rate of of 90%. Even deducting the fees moving in and out, pretty sweet returns. I decided to stop doing it for risk reasons he didn't cover, but that pertain to me. He definitely makes a good point.
  • SD
    Shayne D.
    4 January 2021 @ 22:51
    How do you lock in profit during the bull run so you don't watch your portfolio drop when it ends, without selling? Options, futures?
  • LS
    Lemony S.
    1 January 2021 @ 01:32
    Let's get ready for a wild ride in 2021! Happy New year to all.
  • AM
    Avici M.
    29 December 2020 @ 20:46
    Great interview RV!! One small suggestion, can you pls list the key word of each section, the ones shown throughout the interview, in the description sections? Thank you.
    • AM
      Avici M.
      29 December 2020 @ 21:13
      Oh just saw it is included in the vid. All good :)
  • TP
    Timothy P.
    22 December 2020 @ 17:35
    Another day, yet another RV crypto video that espouses the "Bitcoin Maximalist" slur coined by ETH founder Vitalik Buterin. Can't just call us "Bitcoiners"? What is this obsession of using that term? Have a bunch of ETH bags, Raoul? I also take exception at Raoul's insistence that all coins are essentially equivalent, because he believes in "diversification". Look at XRP (Ripple) which Raoul recently has espoused and supported -- they're currently in the throes of an SEC lawsuit, having lost over 15% (more like 23% including today) because XRP has a CEO. Yet Raoul didn't understand why people pushed back on him supporting this coin. You see, we're all "tribalist" and "maximalists". We don't have his rose-colored glasses view that coins with wildly different issuance, monetary policy, network nodes and the rest are somehow all under the same family of assets, so why discriminate? This boggles my mind -- Raoul has run a hedge fund, among other things -- you want to tell me that he treated every tradeable instrument the same in his portfolio? Of course not -- so why would he insist on treating these altcoins the same? It reeks to me, and I don't like it. As for forks and the rest, there's a lot of history that RV doesn't get right. It is more than the events themselves, but the motivations and the actors behind them. I lived through it, so I know the history. It is also primarily why I'm very reluctant to embrace a coin that makes grandiose claims, because 99% of them have crashed and burned on the long tail of failure. But RV doesn't touch on this. Get it together, honestly. Its like crypto n00b hour around here, and what irritates me is that a single bit of due diligence would educate RV enough to stop doing these things, including the "marketcap" comparison which is utterly cringeworthy. TL;DR - Raoul somehow doesn't understand that very different coins are not equivalent, so accepts them all equally.
    • TP
      Timothy P.
      22 December 2020 @ 19:37
      Oops, the XRP top-tickers are angry today.... What a laugh.
    • AN
      Aaron N.
      22 December 2020 @ 21:12
      Sounds like RV is falling short of your expectations. It's not an echo chamber. They're quite aware of the various "use cases" that different coins were designed to solve, among other factors you brought up. Hope that helps. Good luck.
    • NC
      NATHAN C.
      23 December 2020 @ 00:31
      Where did Raoul insist on that? I haven't seen it.
    • TW
      Todd W.
      23 December 2020 @ 04:43
      Can we all stop for like two seconds. Imagine a world.. where you optionally pay money for the insights/ opinions of large variety of talented investors. In this imagined world, it upsets you so much that not everyone already agrees with what you already think that you get so upset you need complain in the comment section. "OMG how could anyone not be an absolutest. Anyone with any sense would understand that theres only one way of thinking and thats mine. Everyone else is such a n00b Im going back to the bitcoin forums where everyone is smart smart"...... Like people optionally choose to pay fiat money to live in this world lol.
    • TP
      Timothy P.
      23 December 2020 @ 06:45
      @Todd W - Oh look, you have zero retorts for any of the points I've made. So no counter-argument? Also, if you imagine me in some state of distress I'm sorry to inform you I'm cool as a cucumber. Do I find RV's perpetual n00b-ness embarrassingly naive? Surely I do, but I also hope they'll improve. Unlike yourself, I demand more than plunking down my money and staring at the screen with nary a critical thought.
    • TP
      Timothy P.
      23 December 2020 @ 06:48
      @Aaron N - They're "quite aware" eh? Really? They keep using "marketcap" like it means something in crypto -- Protip - It doesn't -- and they also perpetuate stereotypes that I expect some no-coiner middle-management suit to parrot from a cursory examination of the space. How about depth? How about understanding it to the point where casual slurs such as "Bitcoin Maximalist" aren't uttered because they know the history and its motives? How about that? But no, the RV faithful can't stand any REAL criticism, because that would shine the light on people who are more than willing to take anything stuffed down their throats. How about asking for better standards? So hard? Get outta here...
    • JL
      Jason L.
      23 December 2020 @ 19:50
      Kinda has the feel of 2017 YouTube channels. This interview was quality, IMO .... but many of the others aren't exploring the underside enough. When Ivan on Tech? ;)
    • Hv
      Hannah v.
      24 December 2020 @ 02:21
      Raoul? How about charging annual $100usd subscription for Real Vision Crypto. It would tidy up the comments section.
    • AM
      Avici M.
      29 December 2020 @ 20:43
      This is a great interview!! Ppl should just simply ignore nonsense comments so as not to give them the attention they are seeking.
  • PB
    Paul B.
    28 December 2020 @ 19:18
    Regulation was mentioned to be coming “in a couple of weeks” and this was filmed on December 10th. Was the Ripple lawsuit what was being referenced or is this still to come?
  • FP
    Frantisek P.
    28 December 2020 @ 08:54
    So what is your performance mr Paul? I bet you don't have much alpha...
  • JC
    John C.
    26 December 2020 @ 19:20
    You mentioned your exchange arbitrage... i am a stupid retail investor and I see huge arbitrage with greyscale. Grayscale Ethereum was down 17% Christmas eve. Actual ETH has been going up since Christmas. On Monday grayscale will soar. Grayscale ALWAYS overshoots to the downside and the upside...
  • DK
    Deepak K.
    25 December 2020 @ 13:43
    It's just be or anybody else also thinking the videos is running at 3X!
    • DK
      Deepak K.
      25 December 2020 @ 13:43
      *Me
  • AH
    Aarona H.
    24 December 2020 @ 15:30
    fantastic conversation!!!
  • Hv
    Hannah v.
    24 December 2020 @ 02:25
    I’m sad the comments section for FREE Real Vision Crypto has become youtubey in flavour. 😑.
  • TZ
    Toomas Z.
    23 December 2020 @ 23:27
    Here's a question that has puzzled me for weeks: As described in the interview, Bitcoin as an asset has ~80% retracement bear markets (which arguably reduce as volatility reduces over time). Institutional money is now beginning to enter the asset class slowly. Central banks do not allow bear markets as the financial system is so leveraged/financialized it would almost certainly result in a systemic crisis. In the last bear market, systemic crisis issues were discussed by bankers, but dismissed as the market was too small to affect the system. When a new bear market inevitably arrives for crypto (as has been the case cyclically), it is likely that the market is now large enough to potentially cause global liquidity issues and a sell off in traditional markets. How do governments respond to a potential crisis involving non-sovereign assets that challenge their sovereign currency monopoly? My assumption is with deep anger as they have no alternative but to print, along with it may come some attempt to destroy the industry.
  • BS
    Benjamin S.
    23 December 2020 @ 07:15
    If you are trading crypto, as apposed to just hold-ing, the discussion that takes places around the 20 minute mark is a must see. It's important to trading in general - how to identify when the blow off top is about to happen. People move out the risk curve into more and more speculative assets. The alts will likely begin to vastly outperform BTC at some point. When that happens, look out below.
    • BS
      Benjamin S.
      23 December 2020 @ 07:18
      Sorry, meant to say "beginning around the 50 minute mark" not 20 minute mark. And, well, HODL-ing, not holding, but the autocorrect kicked in.
  • TH
    T H.
    23 December 2020 @ 01:17
    Brilliant perspectives shared here; thank you. I particularly appreciated the conversations around alpha, and the ways in which an investor can build a sustainable competitive advantage in this space that can last for up to or more than a decade. Again I think of how democratized this possibility is, and how that is such a contrast to web 1.0 and especially web 2.0, where key VCs captured most of the alpha for themselves and their already-rich clientele.
  • BS
    Boris S.
    22 December 2020 @ 21:20
    Even Raouls dog barks bullishly talking bout bitcoin :D
  • DS
    Devin S.
    22 December 2020 @ 16:08
    Let's go we got Ari back!