Real Vision Founder: After 13 Years of Bull and Bear Markets, Rethinking Cryptocurrency's Long-Term Value

Author: Raoul Pal, Founder of Real Vision

Compiled by: Chopper, Foresight News

Open your feed now, and you'll find market sentiment is overwhelmingly pessimistic. The cycle is over, the crypto industry is dead, the four-year bull-bear pattern has failed, and everyone who advised you to buy was wrong. When price action deviates from public expectation, once price movements exceed understanding, pessimism spreads. History always repeats itself.

I have witnessed countless such cycles and know clearly how the story ends. Having been in the crypto industry for thirteen years, I have made almost every mistake possible. Before outlining my logic for remaining bullish, let's talk about the pitfalls I've encountered; true experience always comes from failure.

In 2013, I entered when Bitcoin was at $200. But the timing of the purchase wasn't the point. Before buying my first Bitcoin, I wrote the first-ever macro valuation analysis for Bitcoin.

By today's standards, this valuation model was very rough. I borrowed from commodity valuation approaches, calculated the total above-ground and underground gold reserves, and applied this framework to Bitcoin. The conclusion was: if Bitcoin could become digital gold, assuming gold prices maintain current levels, the value of a single Bitcoin could reach $1 million.

This article quickly spread through Silicon Valley and the financial circle; at that time, no one had built a valuation system for Bitcoin from a macro perspective. I didn't just publish views; I also recommended Bitcoin to all GMI subscribers, including multiple hedge funds and family offices. In 2013, recommending Bitcoin at $200 to such investors required immense courage.

My core conclusion at the time was: "Bitcoin is currently $200, the long-term target price could hit $1 million. Considering there was a high probability I would misjudge, I actively discounted it, setting a ten-year target price of $100,000."

The final result roughly matched the prediction; Bitcoin did indeed touch this price level.

However, predicting the endpoint correctly and understanding the volatility along the way are completely different things.

Looking back on this journey, I entered at an excellent price, the price doubled and tripled consecutively, then plummeted 84%. I comforted myself that this was a long-term bet, no action needed. Later, the market surged again at the end of 2017; one day staring at the screen, the price climbed to an unbelievable number, so I chose to sell.

Why? Fear, Uncertainty, and Doubt (FUD) was at play. Fork controversies emerged endlessly, "bubble theory" was everywhere, and I kept telling myself: seize the tenfold gain and take profits timely, don't let all profits evaporate.

I cleared my position and left. But after I sold, Bitcoin continued to rise another ten times.

I tried to pretend I wasn't regretful, but deep down I knew I had made a huge mistake. Worse, during the pandemic, coin prices plummeted again, and I re-entered, thinking my bottom-fishing was very clever. The fact was not so: I sold at $2,000, but bought back at $8,000 or $9,000. Frequent trading, taking profits at highs, repeated short-term trading around positions... all these operations hindered the only correct long-term strategy from working.

I once roughly calculated that if the initial $200,000 principal had been held statically, it would be worth approximately hundreds of millions of dollars today. The power of compounding lies here, and it also proves that people easily make foolish decisions. The asset itself continued to appreciate, while I constantly artificially interrupted this process.

Missing out on huge floating profits, this expensive tuition fee taught me a lesson: extend the cycle perspective, discard noise, hold long-term. For any brokerage, "dormant accounts" often yield the best returns, because holders do not operate assets arbitrarily.

The above is my review. Next, let's talk about the logic I have realized now but failed to see completely back then.

Bitcoin is a Vault for Value Storage

In the past few weeks, I have continuously written articles discussing currency devaluation, and all analysis ultimately points here. Demographics breed debt, debt drives continuous currency devaluation; compared to long-term assets, cash purchasing power shrinks by approximately 8% annually. To fully understand this transmission logic, you can read my previous article; simply put: holding cash is like holding a constantly melting ice cube, the rational choice is to hold assets whose total supply cannot be artificially inflated.

Bitcoin is the purest target among such assets. The total supply is permanently locked at 21 million coins, there is no committee voting to inflate supply. It is the hardest currency created by humans, undertaking the function of a value storage layer, a digital vault.

But the vault has a growth ceiling, understanding this is crucial. Bitcoin's target market is global savings capital seeking a safe haven. The scale is roughly equivalent to the approximately $35 trillion gold market, plus a portion of other assets used for wealth preservation. My judgment is that Bitcoin will continue to seize the allocation share of this capital. Its only real competitor is Zcash, a cryptocurrency with privacy attributes, which might get 10% of the market in the future, with the remaining share occupied by Bitcoin.

So, the digital vault logic holds, Bitcoin is a quality asset. But the vault is only half the story, or even just a small half.

An Economic System Built Upon the Vault

Bitcoin is not programmable. Based on its original design, it is only good at one thing and does not undertake any other functions. Smart contract public chains are a completely different track. There are many public chains on the market, I remain bullish on three: Ethereum, Solana, and Sui. The easiest mistake the public makes is lumping them together with Bitcoin as "cryptocurrencies" and discussing which coin will ultimately win.

People ignore the key fact that their missions are fundamentally different. Bitcoin solves value storage, smart contract platforms solve multi-party collaboration.

The Exponential Age framework I proposed believes that: artificial intelligence, robotics, energy, and crypto technology are simultaneously welcoming a development explosion. The future economy will no longer rely on human labor drive, but will be led by machines. Billions of AI agents will conduct transactions uninterruptedly, purchasing computing power, settling with each other, with transaction speeds far exceeding humans.

Following this comes an obvious question: what will they rely on to complete transactions? The traditional banking system is not applicable. The machine economy cannot tolerate a three-day clearing cycle, reliance on correspondent banks, or clearing institutions that close on weekends. Smart agents need programmable, instant settlement, 24/7 operating underlying channels — this is the value of smart contract public chains. They will become the settlement layer for the machine economy in the exponential age.

Therefore, allocating to such public chains is not betting on a certain token, but betting on the infrastructure on which the next generation economy relies to operate. The token itself is not just currency, but the equity of holders in the network, the collaboration layer of the digital age.

This also means that Bitcoin valuation models cannot be applied to public chains, nor can traditional corporate valuation methods be used to measure them. A public chain is not a company, but an economy. To evaluate the value of an economy, one must look at the total volume of economic activity occurring on it.

We compare the target markets of the two major tracks together, the core argument is clear at a glance. Bitcoin targets global savings capital, corresponding to a volume of approximately $35 trillion, scale equivalent to gold, worth allocating to. Smart contract platforms, in the future, are expected to carry the settlement needs of global real estate (approximately $400 trillion), global debt (approximately $325 trillion), and global stock markets (approximately $125 trillion). This is not just larger in scale, but an order of magnitude higher.

The conclusion is self-evident, in the long run, the total market cap sum of quality smart contract public chains will be several times that of Bitcoin. This does not mean Bitcoin will fail, it will perfectly complete its value storage mission. The reason lies in: an economy built upon a vault will naturally have a volume larger than the vault itself. The vault stores savings capital, the underlying channel carries the circulation of the entire economy.

Counterargument: Are They Just Utility Tokens?

I can foresee the mainstream market bearish views, worth carefully dismantling rather than simply refuting. This argument is as follows: Bitcoin is born for capital preservation from the underlying design, accumulating value continuously as currency. Ethereum, Solana, Sui are merely functional assets, financial infrastructure; infrastructure will not appreciate continuously like pure monetary assets. No matter how good the technology is, it does not count as a quality investment target.

But reverse deduction reveals loopholes. Pure value storage assets, the growth ceiling is determined by the total scale of savings seeking preservation. The volume is huge, but there is a clear ceiling. The ceiling of infrastructure assets, however, depends on all applications that can be built upon them; whenever a new project is born, the ceiling will be raised further. Low fees do not equal low value. The underlying network being able to achieve scaled adoption relies precisely on low costs, and network value also continues to rise accordingly.

There is a clear dividing line here, lending protocols and exchanges built on Ethereum belong to commercial projects, possessing revenue, competitive barriers, and can be valued by cash flow. Ethereum itself does not belong to a commercial project. Ethereum's value comes from the sum of all ecosystems built upon it. Once Ethereum stalls, what disappears is not just one enterprise, all Layer 2 networks, most of the stablecoin market, and the entire decentralized finance ecosystem will collapse instantly. This is its core value, it is the underlying foundation on which all projects rely to survive, not one of many projects.

The same logic explains why Layer 2 networks find it difficult to replicate the value of Layer 1 public chains. Layer 2 networks rent security from the underlying main chain, and large amounts of revenue ultimately flow back to the underlying layer. Even if a prosperous Layer 2 network is born on Ethereum, it essentially continues to push up Ethereum's value. Ultimately all value settles in the underlying Layer 1 public chain.

Why is the Market Generally Pessimistic Now?

Back to the market sentiment at the beginning of the article. If the long-term logic is so solid, why is the current market situation so agonizing? The general environment of continuous loose liquidity and tending towards eased financial conditions has already taken shape. The accident that disrupted the market rhythm lies in that the market rise did not arrive as expected. The market plummet in October 2025 and government shutdown triggered a series of disturbances, destroying the original market rhythm, delaying the timing of the rally. Many investors directly interpret "delay" as "logic completely failed".

The underlying logic has never collapsed. The gap between crypto asset prices and liquidity expectations has lasted longer than I expected, but the gap will only see repair, it will not close permanently.

Previously, the US Manufacturing PMI index was below the expansion-contraction line for a long time, and the business cycle fell into depression. The crypto industry highly relies on market activity and investment willingness, naturally needing macro cycle warming. For a long period, the macro environment continued to be under pressure. Besides this, Bitcoin periodically showed liquidity discount trends, decoupling from the overall liquidity trend, this phenomenon plays out cyclically. Crypto asset volatility is higher than liquidity indicators, when the market is overheated gains exceed expectations, when the market cools losses also exceed expectations. Extending the time dimension, the correlation coefficient between the two remains approximately 87%.

Currently in a cold market phase, therefore many people judge the long-term logic failed, the fact is not so. The business cycle has bottomed out and rebounded. The Manufacturing PMI index has been in the expansion range for six consecutive months, the latest data in July recorded 53.3. Historical patterns indicate, under such macro environments, the crypto market often welcomes market warming. In the cycle upward phase, investor risk appetite increases, differentiation will also occur within the crypto market: junk bonds outperform treasury bonds, small-cap targets outperform head large-cap targets; smart contract public chains like Ethereum outperform Bitcoin. The reason lies in, economic activity pushes up block space demand, while savings demand drives Bitcoin market trends.

How to Operate

I will not give a fixed investment portfolio, nor will I predict the bottom. Thirteen years of industry experience taught me, no one can time the market accurately, forcing predictions, ultimately will likely replay the tragedy of selling Bitcoin at $2,000.

The review at the beginning of the article is the most important inspiration. The crypto track is a long-term game, simultaneously extremely tests mindset, many people's income and wealth are deeply bound to the industry. The ultimate winners are not the people with the strongest short-term trading abilities. But investors who can clearly understand the essence of held assets, believe in the continuous adoption trend of the network, and can endure a 50% deep drawdown occurring every few years.

Extend the vision, strip away market noise. Allocate to both digital vault (Bitcoin) and economic underlying channels (quality smart contract public chains), comply with the industry growth curve, no need to expend energy trying to beat the cycle.