Why Crypto Could Be Near A Major Turning Point w/ Richard Galvin

Richard Galvin (0:00)

Are we at or near the bottom of the crypto cycle? And I actually think that's a pretty easy call to make. You know, volumes are going to skyrocket from where they are today. I don't think you need to overthink it.

Raoul Pal (0:08)

So we are going to underestimate how fast the agents roll out. It's probably a 50x. As both sides of the equation start just tokenizing all assets, then the use of blockchain explodes. And so therefore, value should explode.

Richard Galvin (0:22)

Calm before the storm, let's hope.

Raoul Pal (0:28)

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Well, we journey together to that nexus of understanding of macro crypto and the exponential age of technology.

Now, crypto has been on everybody's minds because it's not been a great market. But it's all about time horizon and it always has been. And I like to get the perspectives that people have been around a while and understand how this market works and when the opportunities are there. So today, I'm going to speak to good friend of mine, hedge fund manager, Richard Galvin, who runs a crypto hedge fund and VC firm in Australia. And he's a really interesting and thoughtful person to look at the opportunities. I think he's going to be more bullish than you imagine. I think most people are when prices have been down. Well, certainly those have been around for a while. Join me, Raoul Pal, as I go on a journey of discovery through the macro, crypto and exponential age landscapes. In The Journeyman, I talk to the smartest people in the world so we can all become smarter together.

Richard Galvin, how the devil are you?

Richard Galvin (1:54)

Yeah, good thanks. Good to be with you again.

Raoul Pal (1:56)

Yeah, it's always good. We haven't caught up for a while. So I'm looking forward to this.

Richard Galvin (2:00)

Yeah, last time I think was a little bit after 10th of October last year. So hopefully in happier times. Yeah.

Raoul Pal (2:06)

So what's your read right now? Where the hell are we? What's going on?

Richard Galvin (2:11)

Yeah, I think we're a pretty good intersection actually. Like it feels like we've kind of come through and done the hard yards, right? And markets been pretty broadly reset.

Like a lot of assets that don't really have a clear connection to AI. We've sort of struggled to catch up and sort of keep up with everything else. And it feels like the markets in that sort of nice little place where you get to get some good entries into some, you know, if you believe crypto is not going away, it feels like a pretty good place to enter a lot of different things.

Raoul Pal (2:39)

Yeah, I mean, I do a simple thing is like I do a log channel, log regression channel on a weekly chart going back to let's say 2017 And once it gets to like that two standard deviation, one and a half standard deviations oversold, that's when you start paying attention to, okay, what should I be buying here?

Richard Galvin (2:57)

Yeah, I think crypto is extremely good at doing stupid things at the top and the bottom, right? In both directions. So look, the bottom always feels dramatically bad and the top always feels like it's never going to end. And that's just kind of what crypto does. I think the barometer we like to follow is one of the core attributes of crypto is clearly trading and decentralized trading and looking a lot at sort of decentralized trading volumes. And it's a pretty clear cycle. If you look at, it sort of peaked around May 21 at sort of the $200 billion kind of from nothing, then fell away over a bit over a year, over 18 months down to $33 billion. Well, so 84% dropped to the end of 2022, which was, you know, equally pretty depressing time.

Then went on a 16x rally through to January 2025 to $500 billion. And it's come back to about $140, $130 billion, whatever stat you kind of use. For us, that fills around sort of a cyclical bottom for crypto. And you know, interestingly, sort of as night follows day, we started to see a little bit of a pick up through that through August and into September.