Researched macro finance for 20 years Seasoned Trader, which coins will be bought in this cycle?

After studying macro for 20 years in TradFi, which coins will Raoul Pal buy in this cycle? His answer is: allocate 90% of the money to BTC, ETH, SOL, SUI, and DOGE. In the latest podcast, this “financial veteran” shared his “Crypto Millionaire Guide” - how to allocate assets and find potential coins. The essence is here (1/).

Raoul Pal: Crypto coins are in the “banana zone” Raoul Pal started his career in 1990.

In 1997, he knocked on the door of Goldman Sachs, where he started working in hedge fund sales.

After 5 years, he went to GLG, where he was responsible for managing the fund’s investment portfolio until 2005. In the same year, he founded Global Macro Investor, which provides quantifiable and readable research for the global macro investment industry, and continues to do so today.

In addition, he founded a financial media platform called Real Vision in 2014, which helps its members understand the complex financial, business, and global economic world.

As a staunch BTC bull, Raoul Pal predicted before the US election: liquidity is entering the market, and the debt refinancing cycle driven by macroeconomic forces will affect the prices of all assets, but the performance of cryptocurrencies is particularly prominent: the market will enter a “banana zone”, in which cryptocurrencies typically experience vertical growth.

As an investor, the simplest way is to allocate most of the assets to major cryptocurrencies, maintain a core investment portfolio, and then be patient, excluding external noise. (2/)

**BTC VS ETH VS SOL, who will have the highest increase?

Raoul Pal believes that the market value of the cryptocurrency coin in this cycle will reach 10 to 15 trillion US dollars, which may increase by 5-7 times compared to the current 2.2 trillion US dollars (at the time of the interview).

And he believes that the performance of SOL will surpass ETH, the performance of ETH will surpass BTC: BTC will probably double or triple, SOL may increase by 8 times or more, while ETH will be somewhere in the middle. In terms of asset allocation, Pal’s rule is roughly 90% invested in mainstream assets and 10% invested in others.

But at some point, one or more ‘new products’ will be selected, and more bets will be placed on the ‘new products’.

For example, SUI may have a 25% allocation to SUI and 65% to other investments.

Regarding Memecoin, he said that considering Memecoin is still in the early stage, only a small amount of space has been set aside for ‘gambling’, and he doesn’t want to make it too big. (3/)

Why bullish on SOL, Sui and Doge?

In July 2024, Pal announced on his YouTube channel that 90% of his personal investment in cryptocurrencies is in SOL, because despite the significant price volatility, it has shown extraordinary resilience.

Solana has a good community, excellent user experience, outstanding technology, the ability to issue NFTs on the chain at low cost, and fast transaction speed. The popularity of Memecoin on Solana is also one of the breakthroughs in on-chain usage. The ecosystem is accelerating its growth, just like ETH in the previous cycle. Therefore, he believes that SOL is a low-risk area and a good place to invest a large amount of funds.

In addition to Solana, Pal also likes Sui and Doge.

I chose SUI because: SUI is innovative in technology and has shown superior performance in the market compared to other major cryptocurrencies such as Solana and Ethereum.

Price performance is also important, until the price performance of SUI is better than the overall performance of other cryptocurrencies, Pal feels confident that SUI may be a “new coin”.

Choosing Doge because of its powerful cultural identity and international recognition, namely its broad community support. This includes Elon Musk’s support for Doge, which is also an influential factor as he has the ability to drive Doge’s development through his social media influence and actual actions.

In addition, according to the trading chart and historical performance of DOGE, it experiences a huge price fluctuation at some point every four years, and this cyclical behavior is part of its investment decision-making.

In his opinion, Doge is the Solana of Memecoins. (4/)

How to explore the potential of coins?

Pal put forward a point of view: scarcity is not in the coin, scarcity is in attention. The real game is to capture attention.

Therefore, the key to discovering potential assets is to identify projects that can attract market attention and liquidity. This typically involves analyzing macroeconomic trends, such as changes in monetary policy and global events, which can impact asset attention. This screening theory applies equally to Memecoins. For Memecoins, the most crucial thing is to understand the cultural significance of Memecoins and community acceptance. It is important to invest in Memecoins that resonate with a broad audience and have strong community support.

Pay attention to community dynamics, including social media, price trends, and market sentiment, and look for assets that can attract investor attention when prices are stable or rising. These assets have the potential to become the next hot commodity. (5/)

What is the difference between the popularity of Memecoins in this cycle and NFTs in the previous cycle?

While holding a certain amount of Memecoin, Pal believes that Memecoin is more about trading and investment, usually associated with specific communities or cultural phenomena, and its value partly comes from the sense of identity and involvement among community members.

They may rapidly appreciate in value due to the heat of the community, but there is also a risk of rapid loss of value.

And NFTs represent a new asset class that is not just a replica of existing cryptocurrencies, but a new infrastructure of the internet. Their value lies in their uniqueness, scarcity, and cultural significance. They serve as proof of ownership for digital art and collectibles, providing new opportunities for generational wealth accumulation. (6/)

There is not much time left for everyone to make money. Pal proposed that the market cycle is very urgent, and there may still be 6-8 months to make money. This means that before the market peaks, investors need to adjust their capital risk ratio correctly: Assuming the market reaches 12 trillion US dollars, your major asset should earn the same amount as the market growth. If so, you are doing it right. If your assets rise by 1% and 100%, regardless of what it is, other investment portfolios rise by x, if they all eventually keep pace with the market, then you have mastered the risk-adjusted return.

Pal’s advice is to find a balanced investment portfolio, with a higher-risk asset paired with a lower-risk asset. For example, Pal believes that Solana is a relatively safe and highly ranked asset, while Sui is a newly selected higher-risk asset. If the market develops rapidly, Sol will grow to become one of the top three cryptocurrencies, while Sui will enter the top ten.

Similarly, in the Memecoin field, Doge is a safer asset, while other Memecoin are riskier.

To observe different cycles and find vibrant representative coins, instead of Fomo. (7/)

In summary, Pal emphasizes three points for investment in the cryptocurrency market: “Doom sales, optimism makes money”

1. Establish a connection with the community and remember the importance of value and community in investment, rather than short-term profits.
2. DaiCoin is not a game of scarcity, but attention.
3. Overweighting is placed on a relatively safe asset and held, accompanied by asset appreciation during market cycles; using a small amount of assets to bet on riskier coins, selecting ‘new products’ through macro, community conditions, technological innovation, ecological development, and the development of alternative coins.

Finally, Pal also mentioned: “Doom sales, optimism makes money” In the financial field, historically successful investors (legendary figures) often make money by predicting and taking advantage of negative market periods, buying when the market is down, and selling before the market recovers, thus making a profit.

Because most of the time, everything will turn out fine. Humanity will not self-destruct. Central banks and governments will take measures to prevent a sharp market decline. Technological progress is improving our lives and creating more wealth. Although the market will have periodic fluctuations, in the long run, the market tends to grow upward. This understanding tells investors that they should look for buying opportunities when the market falls, instead of panic selling. (8/)