Raoul Pal vs. Lyn Alden

Lyn Alden vs. Raoul Pal

By Jimmython | cryptoinvesting | 9 Feb 2021

Laura Shin recently did a podcast with two of everyone's favorite financial analysts, Raoul Pal and Lyn Alden.


The video is a good listen regardless of who you agree with. The only thing I didn't like was that Laura definitely seemed to take sides and throw lowkey shade instead of being a neutral moderator. I'll leave it to you to decide if you agree with that. But the larger point was this:

The core discussion was about investment in ETH. Raoul was in headfirst; Lyn was cautiously circling. We found out that Raoul had already thrown himself way farther out in the yield curve, stating that he had "bought an equally weighted basket of alts" in a rather unscientific fashion. His entire argument about investing this way was based on the network effect, eschewing pretty much all other analysis. He also stated he wouldn't say which alts he bought — probably because he didn't want to admit being a known financial professional and investing in food memes and ponzis. Imagine Raoul Pal saying to 100,000 Real Vision viewers who pay good money for serious money talk, "I'm going to send my grandkids to college farming pickles!!"

Lyn was incredibly precise as she always was. Even though I'm a Raoul fan because his unbridled passion for the space undoubtedly pumps bags, I can say that on paper, Lyn won this "argument" (if it can be classified as such). If you ran a family office and you had to explain your investment theory to a client, you'd want to be Lyn. Raoul sounded more like a kid in a candy store, while Lyn brought up salient points that ether may not pump like we think it will because the network effect does not always result in asset prices rising. The poignant example she gave was that "there are no email companies with a ton of money." Mic drop. This was right after Raoul fell for Laura's bait question asking if the network effect applied the same regardless of industry. Girl power.

So Raoul is the gold digger and Lyn is the shovel seller. But does Lyn's approach automatically make more sense? I don't know.

The difference between the crypto rush and the gold rush is that you can do research on even the investments farthest out in the yield curve. Digging for crypto gains is also not an all-or-nothing proposition. Even if a project is a complete scam, you can still come out with multiples of your investment if you get in early enough or use technical analysis to buy a bottom. Also, the asymmetric risk enveloping the entire space means that you can lose 5 or 6 investments 100% and make up for them with 1 winner. In an environment like this, Raoul's "macro" approach is not necessarily inferior to Lyn's more measured, sensible approach. Raoul's may actually come out on top in this market. His major point — and again, it sounds really naive on paper — is that people underestimate the power of the network effect because our minds just aren't made to think in multiples and exponentials.

This is absolutely true. The gains in my portfolio would be insane in traditional markets. Instant sell, because you couldn't in a million years expect any more. But all signs point to us being in the beginning of the bull market, not even the middle. So I'm constantly fighting my own urge to sell, sell, sell because I just can't believe that these kinds of gains are possible in such a short period of time. It's probably the same fight Lyn is having. And since she's incentivized to reject that viewpoint outright because she's built a brand around being the most sober and precise advisor, she'll probably never get to the point of accepting the possible magnitude of crypto bull runs.

This is especially true when analyzing ETH. The degens still run the price of ether. So no amount of fundamental analysis will stop a price pump to $5000 if the degens want a $5000 Ethereum. Hell, ether's already overcome its own massive inefficiency to achieve the network effect. ETH fees applied to any other business would be an instant bankruptcy. Hell, if ETH was a physical business, the neighborhood would probably burn down the building because of the fees. They are really that annoying.

The point I'm trying to make is you can't overthink these once in a lifetime opportunities. Doing your homework to reduce your risk profile is always good. But this unique time in the crypto space (it won't be true in 2 years) gives everyone the privilege of a few YOLOs. As a matter of fact, the market may even reward your proper use of the YOLO. So while Lyn wins hands down on paper, Raoul may actually reap more of the benefits of an unsensible market. Do you want to be right, or do you want to make money?

I usually don't ask for comments, because I don't give a damn. But if anyone else watched that video and has thoughts, I'd love to hear them.



Always remember:

Burgerswap Bridge will steal your crypto
Deus.Finance is led by a psychotic wannabe despot
AllianceBlock is a shit project
All algorithmic stablecoins (Basis Cash, Mithril, Empty Set Dollar) are a SCAM

Don’t get your bitcoin from PayPal
Trade on BSC, not Ethereum
Ivan on Tech, Elliotrades and Bitboy are complete liars, and
If you are always losing money trading crypto, read here.

Gems I'm investing in:

NFTs - Doki Doki
Trading - Unimex
Finance - Soar


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I believe the best way to make money in any market is to cut out the scams and invest well with what's left. I traded up from 5 figures to 7 in the 2021 bull market with this strategy, and more importantly, kept that money during the bear.

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