Raoul Pal: This Is the Setup Investors Wait Decades For

Raoul Pal (0:00)

Well, you've been given the opportunity for the first time ever, which is to own the infrastructure layer that it's all built on.

John Gillan (0:07)

Clarity Act is about to get a vote. The Fed is about to make an interest rate decision, and the market is worried that AI is going to kill us all. What do investors need to know about all of this? What does this have to do with crypto? And how do we make sense of everything? Hello, and welcome to Milk Road Crypto, the podcast that knows that this week is either going to be wildly bullish or one of the biggest gut punches since October 10th. I'm your host John Gillan. Today is Monday, September 14th, and today we are joined by a man who is best equipped to make sense of everything, Raoul Pal. Raoul is the co-founder and CEO of Real Vision and the founder of Global Macro Investor. He sits on the board of the Swii Foundation and he just published a new book called The Everything Code. He also made an AI version of himself called Palvatar, which is really fun if you like macro and surreal sci-fi imaginary friends like me. So we've got a lot to cover in this episode today. It's gonna be a lot of fun. If that sounds good to you, make sure you like and subscribe, share this episode with somebody who needs to hear it. And as a reminder, our podcast today is free, and that would not be possible without our wonderful partners at Nexo, the digital asset platform that lets you trade, earn and borrow all in one place. Keep an ear out for more information on them later in the episode. But for now, welcome back to the Milk Road Show. Raoul, how the devil are you?

Raoul Pal (1:16)

I'm great. You're definitely more professional than I am. The way you did the intro, everything, that was so smooth.

I'm lousy at that stuff, so I'm impressed.

John Gillan (1:25)

But you know, you always start your episodes by asking your guests how the devil are you? I always feel like I'm getting a sneak peek on a private conversation. So I love your conversation. So you're doing a great job.

Raoul, really excited to talk to you today. Been a big fan for a long time. I want to start with what's on everyone's mind, which is this updated draft of the Clarity Act and the vote, which I believe will take place around the time this episode is released. It seems like there's momentum back and some life in this. Do you think this passes? And what do you expect the market reaction to be one way or the other?

Raoul Pal (1:57)

You know, I honestly don't know, because it's all down to the ethics stuff, how much the Democrats have shoehorned into that, whether it's even possible to agree. I really don't know. So I think it's still a coin toss. I've always thought that at top level, sort of Trump owes it to the crypto lobby to get this through, because they were the biggest funders of the entire election. So he's going to do everything he possibly can, and he might have to agree to things he wouldn't ordinarily do. However, they've also got the CFTC and the SEC to have some backstop rulings. But obviously, what they'd rather do is get it into law as opposed to something that could be changed. So we'll wait and see. But I think the path is clear. Brian Armstrong came out about it yesterday or the day before saying, listen, either way, it doesn't really matter because we're going to get what we need.

And that will remain in place, at least until the next general election. So look, overall, the markets do need this. They do need it because of all of the institutions in the space. They need the clarity of what they can do, what they can't do. A lot of the protocols need it. Sort of everybody does need this driving forwards. And I think over time, it does help attract more capital. But is it a full trigger? No.

Will the market buy it and then probably fade off afterwards? Probably. Because it doesn't bring a wall of capital in tomorrow. So in the end, it's just more bullish narrative that helps. I mean, you know what we've seen is an extraordinary moment in time where every bank, every financial institution, every payments company, everybody's building on crypto rails.

So it's all happening, but we're just missing the kind of magic of, and we'll talk a bit more about it in a bit, liquidity. We're just not enough liquidity around to drive all of this. But so the Clarity Act, I hope it gets passed. I think there's a good chance, but it's still a bit 50-50, but it doesn't really matter.