Full transcript of “Raoul Pal: "The 1000x Opportunity EVEN Bigger Than Bitcoin" (Time To BUY) 2025 Prediction”. Click a timestamp to open the video at that moment. Need another video? Use the YouTube transcript generator.
0:00 When we first said it, people thought we're insane, but I think it's becoming pretty obvious that AI and robots are replacement humans and we're going to have infinite at some point. So, the idea is where does it we have infinite cuz that breaks the whole GDP magic formula, right? Nothing makes sense anymore. We call that point the economic singularity. And we kind of finger in the air said probably by about 2030 because everything is going exponential in terms of speed of AI and robots. We probably have no idea what an economy looks like anymore or what it means. Everything we all look at is going to fall apart. What's happening right this moment could change the financial system as we know it. In the first half of 2025 alone, Bitcoin has
0:46 surged nearly 50%, outpacing gold and the S&P 500, Ethereum is close behind, fueled by institutional demand and persistent liquidity support. According to Real Vision CEO R Pal, these moves are the natural result of rising global liquidity, a force he sees as more powerful than earnings, valuations, or rate policy on their own. As central banks coordinate stimulus and suppress real yields in response to aging populations and stagnant productivity, capital is pushed into high volatility assets like crypto. And as AI and blockchain drive exponential gains, Pal believes crypto could become the very foundation of the future of global finance. Make sure to stick around until
1:32 the end of the video as Raw Pal together with Real Vision's head of macro research Julian Biddall reveals how all of this could play out for crypto over the next few years. From our work, we kind of noticed the business cycle structure. We're both business cycle analysts. We've both been looking at them for a long time. It changed after 2008 and it became like a metronome every four years. That's only happened once in the past, which was the 1950s and60s where it became very very cyclical. But this is perfectly cyclical. And it it got me thinking for a while, what the hell? So many of us didn't understand what happened to asset prices after 2008. We kind of knew quantitative easing was happening. We kind of knew stuff, but we didn't figure it out. And what I suddenly realized is
2:18 that in 2008, we had a debt jubilee. And in fact it was just forgiveness on interest. You don't pay interest payments. Remember we did that over COVID. Exactly same mechanism. No interest payments. So no interest payments allowed every government who had basically they'd all gone over 100% of GDP and debt. So all economic activity, all economic growth was used to paying of debts. So what they all did was basically restructure their debts between 3 and 5 years creating an almost perfect four-ear cycle. And then when you look at the debts today, we're in that fourth year now where the final part the larger part of the debt is due. And what you f what we found is they start injecting
3:03 liquidity over a period of 3 years reaching maximum liquidity. That liquidity injection never really gets taken back. Some gets taken back in the bare market years when they're withdrawing liquidity, raising interest rates, trying to slow the economic cycle because of inflation or whatever. But over time, liquidity keeps rising. It's rising at a at a rate of about 8% a year. And that is in fact the debasement rate of of of fiat currency. And what happens is, and this is the bit that gets contentious with people and they hate it. If you divide an asset by the global liquidity, you get to see whether it's outperformed. The debate, people hate that chart.
3:48 Oh, they hate it. But it is the best chart in the world because it then tells you, okay, if I'm to allocate to the S&P 500, I'm basically breaking even versus debasement. So the S&P 500 is not really adding much value. Well, when you look at the euro stocks and other markets which are priced in their local currencies, you put them in dollars, they look similar. They all all the markets look very similar once you adjust for debasement. So that was interesting to me. Gold complete almost flatline really versus debasement as it should be, right? That's gold's job. It's to be the stable currency. And once we used looked at the world through this lens of the debasement of fear currency which again
4:34 is still contentious becoming less so nowadays but it was really contentious when we started it. We realized there's actually only two assets outperform this. One is tech stocks and the other is crypto. And so that completely changed how I allocated and how I understood tech stocks. I was a macro guy. I hated tech stocks. They're always too expensive. You're always a value guy. And I realized none of that made sense in this market. That's why the value investors have been getting killed is what had happened was all of this. Now what is driving this? And I think Julian, if you can just bring up those demographic charts cuz these are the absolute most important charts in the world really to understand GDP growth is driven by this magic formula which is debt growth plus
5:21 well debt growth plus population growth plus productivity growth. That's how you drive trend rate of GDP. Now, debt growth's gone uh to extremists and now really we're just servicing debts. Basically, GDP keeps falling and it's falling over time, the trend rate of GDP because of the magic formula. And Julian, if you can get to the demographics charts cuz they're the key ones here. The issue is here the biggest secular factor in all of markets is this one thing is the aging of population. And we can see the birth births rate is falling in the US much faster elsewhere. So that obviously is a function the labor force participation rate the size of the workforce is a function of birth's deaths or the number of people
6:08 being born whatever right and you hear the phrase demographics of destiny they are until the AI and the robots come which are basically artificial humans. This is the problem that faces us all. But there's a a way that they've got around this. If you go to the next chart is they've increased government debt to offset the declining growth from the population. So part of the magic formula was the debt growth and the other was the population growth. So they've used debt growth. This chart nobody understands and nobody even I've it's never been copied on X which is the bizarest thing because it's the most incredible chart of all which basically says that all
6:55 government debt growth is basically a function of um labor force participation rate. Now what's interesting is then okay so the debts keep going up. We know the forward look of of um of where the labor force participation rate's going to go. and how it's being funded is liquidity. This is Fed net liquidity. You're probably better to use uh US total liquidity because that includes the private sector because they're now using the banking sector. So, what they're doing basically is debasing currency to pay for the debt. It's as old as the hills. It's old as the story of economies. It's as old as the story of money. And it's happening at a very penicious rate of
7:42 8%. So you kind of notice it but don't notice it. But what's happening is asset prices keep going up optically because the currency is getting debased. Even if you look look at real estate adjusted by um uh the debasement by liquidity it's basically a flat line but wages are a variable input. And so what you find is that wages do not account for this. It's also the same factor that is driving P ratios that drives everybody nuts. Why are PA ratios going up over time? Because the P goes up because of debasement. The E is a variable and doesn't. So it always goes up in line with the basement and we've shown that over time too. So this is the really big picture of what we look at.
8:28 It allowed us to understand there's only two assets to own. And then we got to a further realization which is okay if everything if 90% of all of sorry 97% of all of NASDAQ's price action is driven by debasement it's the strongest factor we've ever had in any macro regime in history. Okay, great. That makes macro super easy. For crypto it's 90%. So, we've basically got a factor that's so powerful that nothing else matters. Brilliant. So, then let's take the NASDAQ. If we've got one force, one economic force, we take the NASDAQ, we divide it by the um by Bitcoin, it's
9:14 down 99.97%. So, you kind of get one asset allocation only, which is crypto, which is bizarre. In a macro world, we now think you need concentrated portfolios as opposed to diverse portfolios. In fact, diversification just destroys returns now because you've got one clear macro factor. Since 2008, central banks have pumped trillions into the system through debt and stimulus, expanding global liquidity by nearly 8% a year. That constant flow has quietly eroded the value of fiat currencies, making most assets, stocks, real estate, even gold barely keep up.
10:00 Bitcoin, by contrast, continues to outperform. Built outside the fiat system and designed to be scarce, it resists the very debasement pulling everything else down. At the same time, aging populations and falling birth rates are pushing governments to rely on even more unproductive debt. again financed through liquidity. In a world like this, Pal believes focusing on crypto investments is now the smarter move. We saw this happen in the 1950s and60s. I alluded to that before. World War II, the US economy was over 100% of debt GDP. Most economies were what did they do? Financial repression. They shortened the debt. They rolled it every four or five years.
10:45 they use yield curve control to financially repress which is essentially currency debasement um because they you know at the time the dollar was pegged to gold so it's the only way of doing it that way and then what they did was wait for population growth they're the baby boom the largest in history and productivity growth from technology um and what happened was GDP grew faster than debt and over time debt to GDP fell to a manageable level um until the inflation of the '7s is driven by demographics kicked in as everybody started getting into their 20s and so so we've seen that before. So this way around our thought process when we first said it people thought we're insane but I think it's becoming pretty obvious that AI and robots are replacement
11:31 humans and we're going to have infinite at some point. So the idea is where does it we have infinite because that breaks the whole GDP magic formula, right? nothing makes sense anymore. We call that point the economic singularity and we kind of finger in the air said probably by about 2030 because everything is going exponential in terms of speed of AI and robots. We probably have no idea what an economy looks like anymore or what it means. Everything we all look at is going to fall apart. So we kind of think we got 5 years. So this cycle and the next cycle. Um, and part of something Julia and I talk about, you know, between us too is like this cycle people are starting to get it. I think
12:18 once we get through a pause that refreshes a, you know, um, a contraction in liquidity, you know, the cycle I think the next cycle everybody's going to go all in and realize it's the kind of end of times because we just don't know what's beyond that. Nobody does. And anybody who says they is lying because we have literally no idea. when you've got free intelligence, infinite intelligence and we don't know and we don't know, you know, what the energy constraints are going to be or whether there are any or whether we solve them. We just don't know. So, I'd rather be honest with ourselves and say, right, okay, we got 5 years, that's it. Yeah. I mean, the everything code will basically work until it doesn't. And the the reason we we know it'll work is, you know, if we come back to the the the
13:03 charts for a second, you know, as Ral had said, you know, GDP's in decline. It's, you know, trend rate of growth is 2%. And keep that 2% in mind. That's important. You know, the working age population is in decline. Productivity is in decline, but debts have exploded. And, you know, something a lot of people talk about is the fact that the private sector has deleveraged since 2008. But what people don't understand is that this has been a force deleveraging by the banks by tightening credit to to households, right? Um but because productivity is in decline and um demographics are in decline, this debt can't just disappear, right? We can't grow oursel out of that debt. And so we went from 140 to 120% of GDP. Well, where did it go? Huh? Well, the public sector took it on, right? So went went from 100 to 120% of GDP. And this is
13:49 where the problems start and this is where we uncover the everything code. We've un been unlocking it, you know, over the years, but essentially, you know, trend rate of GDP is at 2%. Let's say interest rates are at 2% for easy math. We know they're not. We know they're at 4%. But that all of a sudden means that 100% of GDP is going towards funding uh private sector debts, right? Which is an unproductive source of GDP. So to avoid a GDP doom loop, the only thing that you can do is, you know, again, uh put it on the balance sheet, right? And there's just a huge and if you just look I mean this is US total liquidity which as R said it's public plus private liquidity you know there's just a vast amount of interest payments which still need to be monetized. So what's going on is which which you you know is I mean they're basically issuing
14:36 debts sorry they're basically issuing debts to uh finance the interest on the existing debts which at the end of the debt refi cycle once interest rates going to scan down a little bit once interest rates come lower just gets thrown on the balance sheet right but there's two phases to the everything code China's passed phase one because bond yields have come down because their economy has you know nuked you know to an extent Um, but in order for them to actually make use of the balance sheet, rates have to come lower first. So that's phase one. And then phase two is debasing. And Felix, the other important thing, and I'm sure you've been talking about this as well, is they keep shifting the game. The game was the balance sheet. We all knew the game. Then it moved from the balance sheet to the Fed net liquidity. So then everyone's working out the TGA versus the the the reverse repo. And then they
15:24 went, "Actually, it's total liquidity because we're going to stuff it into the banks." And now the next one is they're going to stuff it into stable coins. All they're doing is find I mean that's Scott Besson's job and Janet Yellen's job was the same. They're bond salesmen. They're just, you know, they're masters of the universe bond salesmen and their job is to find where to where to absorb this and and that is all part of the M2 growth. We are no longer in a normal economic cycle. Low productivity, aging populations, and unsustainable debt have pushed policymakers into relying on one consistent response, more liquidity. Central banks continue expanding the money supply and holding yields down, allowing fiat currencies to gradually erode in value. The effects may not
16:12 always show up in inflation numbers, but they're clearly visible in distorted asset prices. Traditional investments like stocks and real estate are no longer delivering real growth. They're simply keeping pace with dilution. Bitcoin and crypto are different. When measured against liquidity, they've consistently delivered outsized returns. If this continues, crypto will definitely take over as the dominant asset class. Now, if you want to stay most uptodate on the crypto and Bitcoin world, subscribe to my daily 5-minute crypto newsletter. It's a concise resource for the latest expert predictions, breaking news, and top onchain analysis trusted by over 90,000 subscribers for insightful crypto investment information. Don't miss out
16:57 on the opportunity to stay informed in the crypto market. The link is in the description below. I hope you all enjoyed today's video and that it gave you some value. I'll see you all at the next one. And as always, all the best.
