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Raoul Pal :"Ethereum About to ENTER It's MOST EXPLOSIVE ERA Ever" | ETH Update 2026 — Transcript

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0:00What do you do on a day when nearly a
0:01billion dollars of crypto bets get wiped
0:04out? On October 15th, a
0:05hotter-than-expected inflation report
0:07pushed Bitcoin below $81,000 and
0:10triggered close to 1 billion dollars in
0:12liquidations, according to CoinDesk.
0:14Ether took the bigger hit. It fell about
0:166% to around $2,360,
0:19and Ether contracts made up roughly
0:20[music] $286 million of those
0:23liquidations against $197 million for
0:26Bitcoin. Raoul Pal is a former Goldman
0:28Sachs executive [music] and hedge fund
0:30manager who now runs Real Vision and his
0:32Global Macro Investor research service,
0:34which he says has logged every trade it
0:36has recommended since 2005. He opened
0:39Real Vision's Festival of Trading by
0:41sharing his screen and walking through
0:43how he invests his own money with real
0:45numbers on Bitcoin and Ethereum. He put
0:47a dollar figure on where Ethereum's
0:49long-term trend could take it and an
0:51exact price where he'd admit he was
0:53wrong. In this video, we're breaking
0:55down the tool Raoul uses to tell when
0:57Bitcoin is cheap, what the economy and
0:59the money supply are saying about this
1:00cycle, his math on Ethereum, and how he
1:03handles the drawdowns along the way.
1:04Now, let's begin.
1:05>> I hated all of that.
1:07You get stopped out in trades, it didn't
1:09make sense to me. You started looking at
1:11every trade in such short term, when the
1:14market starts giving you gifts.
1:17And when I talk about gifts the market
1:18gives, I realized that, and I fought it
1:21for so long, is that secular trends are
1:24really in your favor because
1:26probabilistically,
1:29you'll make money over time by just
1:30being long.
1:31And then it's up to you to manage the
1:32risk within the cycle. So, let me show
1:35you how to think about approaching this
1:36cuz I find this very useful. So, within
1:39I'm just going to share my screen now.
1:41So, in the Real Vision Data Center, so
1:43I'll go to Data Center,
1:45and under the dashboards,
1:48we've got the GMI dashboard. So, if
1:50you're a
1:52um Alpha member or a Pro member, you get
1:54these.
1:56Um but it's still you can still do this
1:58at home without it. So, I'm going to be
2:00open the pro version. We won't go
2:01through the whole dashboards, but what I
2:03want to get to is the compounding
2:04machines. It's the simplest way to
2:06explain what it is I actually do.
2:09So, the compounding machine basically is
2:14the log regression trend of a trending
2:17asset.
2:18And here I've taken the two
2:21most top-level trends, which is Bitcoin
2:24and Nasdaq. Those are the two that are
2:27obviously in long-term secular trends.
2:31So, then we use how far overbought and
2:33oversold it is to make major asset
2:36allocation decisions. So, on this one
2:39I know that Bitcoin tends to do
2:42fantastic if you buy it for one standard
2:44deviation oversold. And you can see from
2:46the green dots here, these are the buy
2:47signals. One and a half standard
2:49deviations oversold
2:51works really well. They're not perfect.
2:53It's not a trading indicator. And then
2:55on this dashboard, you can choose where
2:57you want to sell. So, I probably don't
2:59want to sell until I'm two standard
3:01deviations overbought, cuz I really want
3:03to sit with the secular trend over time.
3:05So, if I scroll down, that gives you
3:08three exit points and the four entry
3:10points.
3:11But really all I'm saying is log
3:13regression channels are your friend when
3:16it comes to secular trends.
3:18You can set them up yourself on
3:19TradingView. All you need to do is go to
3:21your Claude or ChatGPT, say, "Hey, I
3:23need to build a TradingView indicator
3:25around uh log regression channels." And
3:27it'll build it for you in Pine Script.
3:29You put it into TradingView, and there
3:31you go. I've got weekly versions and
3:33monthly versions. That's how I look at
3:35this to start with.
3:39>> Start with where Bitcoin sits. At around
3:41$81,000, it's roughly 36% below the
3:44$126,080
3:47record it set in October 2025. If you
3:49bought anywhere in the past year, you're
3:51probably underwater. And that's the
3:53stretch where most people start to
3:54wonder whether the whole idea was wrong.
3:56Now, if you've got a strong lean on
3:58where the market is heading next, this
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4:50$50, and you'll get $25. Now, let's get
4:53back to the video. Put one more fact
4:55next to that drawdown. The largest
4:56corporate Bitcoin holder in the world
4:58kept buying through it. Strategies
5:00October 5th filing showed 334 more
5:04Bitcoin bought between October 1st and
5:064th at an average of about $85,839
5:10a coin. Its October 12th filing added
5:12another 250 for a total of roughly
5:15848,000
5:16Bitcoin. That's a company still adding
5:18coins while the price slides. Belief is
5:21one way to call a bottom. Raoul prefers
5:23something he can measure, and he shared
5:25his screen to show it.
5:26>> So, the risk monitor is, "Okay, where am
5:28I in the business cycle?" That matters
5:30to me, right? Because I'm a business
5:31cycle guy, I'm a macro guy. So, the
5:33business cycle here at the simplest
5:35level,
5:36well, the business cycle trend, the ISM,
5:38is rising. It's above the green dots. I
5:40it's trending higher. Nothing to worry
5:42about. And then liquidity is the other
5:44part of it, and liquidity here is still
5:47rising.
5:49So, what I've got is a signal that says
5:50we're in a full cycle expansion.
5:53I'm not here to trade the wiggles, don't
5:54forget. So, what it says is my overall
5:57book should be positioned
5:59pretty long.
6:01And my chosen
6:03secular trends
6:05tend to be
6:07uh crypto
6:09and technology, cuz those are the most
6:11powerful ones. Now, when I move down on
6:13the trend indicator, it shows you
6:15individual positions that are in the pro
6:16book, but importantly, it gives you some
6:20information here.
6:21One
6:23is how volatile the asset is.
6:26Because many people forget, they think,
6:28"Yeah, this is the best thing for me. I
6:29love this trade. It's a small cap stock,
6:31or it's a smaller crypto." And the thing
6:34is 85% volatility, and before you know
6:37it, people are down 70 or 80%. They're
6:40like, "Well, I didn't realize this." So,
6:42volatility is your way of understanding
6:44how risky the asset is, to allow you to
6:47size your own positions accordingly.
6:49Everybody sizes positions differently,
6:50depending on your risk tolerance.
6:53So, if it's a highly volatile position,
6:56you want to reduce. You may have a broad
6:58diversified portfolio, although
6:59diversification
7:00there's not many opportunities.
7:01Everything seems to go risk on, risk
7:03off, cuz it's driven by liquidity.
7:05But, let's say you've got 20 or 30
7:07positions, well, you'll allocate the
7:10risk according to how volatile it is.
7:12So, for example, Bitcoin is more
7:15volatile than the S&P 500, so you'll
7:17have less of it.
7:19Unless you want to overweight that
7:20position, but you understand the
7:21volatility of your own portfolio goes
7:23up. So, this helps you understand what
7:25is the volatility of this thing right
7:27now, and you can see that, for example,
7:30the Nasdaq 100 right now is is not so
7:33volatile, 16% normal.
7:35But, when we look at some of these up
7:36here, like Solana, Solana is 59%
7:40volatility, so it's risky.
7:42So, you wouldn't have the same size bet
7:44unless you've done your homework, you're
7:46concentrating into something, you
7:48understand the drawdowns that are going
7:50to come with that kind of volatility.
7:55>> The economy under this market looks
7:57better than crypto prices do. The
7:58Institute for Supply Management's
8:00factory index came in at 54.5 for
8:03September in a report released on
8:05October 1st. Anything above 50 means
8:07expansion, and it was the ninth straight
8:10month above that line. July's reading of
8:1255.6 was the highest since May 2022, and
8:16new orders, the forward-looking piece,
8:17climbs to 55.3. Money keeps growing,
8:20too. The US M2 money supply hit a record
8:23of about 23.34
8:25trillion dollars in August, and in July,
8:28it was growing about 5.4% a year, its
8:31fastest pace since mid-2022. The same
8:33factory report carried a warning. Its
8:36prices index jumped to 77.9,
8:39up nearly seven points in one month, and
8:41inflation fear is what drove the October
8:4315th sell-off. Bitcoin fell about 84% in
8:47the 2018 bear market, and about 77% in
8:502022. Its drawdown from the October 2025
8:53record, about 36%, is less than half of
8:56either. So, how much of something this
8:58volatile should you own? If you want to
9:00cut through the fear and the noise and
9:02understand where we really are in this
9:04cycle, I break it down every day in the
9:06Crypto Nutshell, my free 5-minute daily
9:09email. No to spin, only the signals that
9:11matter, straight to your inbox. Click
9:13the first link in the description, enter
9:14your email, and you're in.
9:15>> So, here
9:17Yeah, 49% Kager, but it got to two
9:20standard deviations oversold.
9:22I like to look at a confluence of stuff
9:25when it comes to this. We know the
9:27business cycle is expanding.
9:29So, these kind of stocks tend to do
9:31well. In fact, all stocks tend to do
9:33well because the year-on-year rate of
9:35return of the um
9:38of the ISM
9:40and sorry, the ISM basically equals the
9:42year-on-year rate of change in
9:44any asset class.
9:45So, you know when the business cycle
9:47expanding, there's more earnings,
9:49there's more capital around, markets go
9:51up. That's hugely correlated and they
9:53have been since the history of the ISM
9:55from 1947.
9:57So, we know it should be rising. It's in
9:59a secular trend. It's oversold.
10:02It's two standard deviations oversold
10:04versus its weekly trend.
10:06We know that the trend is about between
10:0875 and 50% a year increase in price.
10:13Okay.
10:15And what we've had is a large sideways
10:17consolidation pattern over time. That
10:19tells you it's likely to accelerate if
10:22that happens.
10:24And what you would find is you tend to
10:27top out at two standard deviations
10:28overbought.
10:29Now, two standard deviations overbought,
10:31let's say we get there by
10:35July 2028. I'm just taking a random
10:37example, it's not a prediction.
10:39Well, that gives you a price of
10:4260,000 ETH. Now,
10:44that sounds unreasonable. Okay, fine.
10:46So, we say, okay, maybe one standard
10:48deviation, the trend slows down somewhat
10:50and let's say we top out somewhere in
10:55Q2 2027. Reasonable. We get to about
11:0018,000 ETH.
11:01Is that reasonable compared to how ETH
11:03has moved in the past? Yeah. So, that's
11:05how you think about, okay, what is the
11:07size of the opportunity here? What is
11:09the risk? Now, if I was to look at the
11:10risk reward here, well, you kind of say,
11:13well, you don't really want it below
11:16You probably don't want it below this
11:17zone here. So, let's call it
11:21I'll be unhappy if it came down below
11:24this trend line. Let's use that.
11:26So, trend line is currently at 1,600.
11:29So, let's say 1,500. Okay, 1,500. ETH is
11:33currently at
11:342,700.
11:36So, that's 1,200 points of risk.
11:39Okay, that's a reasonable amount of
11:40risk, right? But, the upside is 300%.
11:45So, you got like 50% downside, 300%
11:47upside. So, that's a 6:1 risk reward.
11:50Okay. Now, we're talking. If you keep
11:52taking risk rewards like that over time,
11:54even if your trades are 50/50 in terms
11:57of the ones you select that win and
11:58don't, over time, you'll compound gains.
12:01That's the game of investing in a
12:03nutshell.
12:07>> Ethereum has had a harder year than
12:09Bitcoin. ETH traded around $2,360
12:13on October 15th, about 52% below its
12:16record near $4,950
12:18from August 2025. The biggest holders
12:21aren't acting like it's over. Bitmain
12:23reported 6,016,414
12:26ETH as of October 4th, about 4.9% of the
12:30entire supply after adding 15,112
12:33coins the week before. History gives
12:35some sense of scale. After the 2022
12:37crash, ETH bottomed near $880 in June of
12:41that year and went on to its record in
12:43August 2025, more than five times
12:45higher. So, what is ETH's long-term
12:48trend worth in dollars?
12:49>> So, basically, overall for me, it's
12:52Okay, what are we trying to express
12:53here? I'm trying to express a simple
12:55thesis that technology and crypto
12:58outperform the debasement of currency
13:00and that we're in secular uptrends due
13:02to adoption.
13:04That's my thesis.
13:06My thesis is also that because of their
13:09rates of return are so high versus other
13:11assets, it's not worth me allocating
13:14capital elsewhere.
13:18Now, other people may not do that. Why
13:20can I do that? Because I have an income
13:22and I have savings
13:24and I have my quality of life. Like, you
13:26can't take my houses away, or whatever
13:28it is. So, I have a position of strength
13:30of which to have volatility to drive
13:33excess returns over time,
13:35and I have an income that I don't rely
13:36on that pool of capital cuz it's
13:37volatile.
13:39So, that's a perfect setup. Everyone has
13:41a different setup. And so, you have to
13:43think what's suitable for you in that
13:45setup. For me, I concentrate because I
13:48have an investment thesis. I've then run
13:51the charts. Okay, what do they look
13:53like? Are they confirming my thesis or
13:55rejecting them? Well, they're all in
13:57secular uptrends. They're compounding
14:00massive returns over time,
14:02and they're generally relatively cheap
14:04versus trend.
14:06The Nasdaq, on the other hand, right now
14:07is has was expensive versus trend, and
14:09that makes sense.
14:10Uh and that gave me the opportunity to
14:13look at
14:15to look at um
14:16let's say the Nasdaq versus crypto
14:18chart, and I put in a secular trend, and
14:21I look is it overbought or oversold? It
14:22got to two standard deviations oversold.
14:23So, crypto's very cheap versus Nasdaq.
14:25Both are in secular uptrends. Maybe
14:27there's an opportunity there. You look
14:28for the DeMark indicators. You say,
14:30"Okay, I should be reallocating more of
14:31my tech into more crypto," which is what
14:34what I've done recently.
14:38>> Raoul recorded that in early October
14:40with ether near $2,700.
14:43By October 15th, it was around $2,360.
14:46Raoul ran his own levels against that
14:48lower price, and the distance down to
14:49his $1,500 line shrinks to about 36%
14:53while his $18,000 scenario than seven
14:56times higher. As long as that line
14:58holds, a cheaper ether improves his
15:00math. Now, look at where the rest of the
15:02market's money went. The Nasdaq 100 was
15:04up nearly 18% for the year by early
15:07August. Tom Lee's Bitmain said in its
15:09October update that ether fell about 10%
15:11over the first 9 months of 2026. So,
15:14what does someone who owns both do about
15:16a gap like that?
15:17>> You know, I've had several years of over
15:19100% performance, but I've also had bad
15:20years.
15:22I've had bad years when everything I
15:24thought I was going to do got wrong.
15:25It's actually you have more of a bad
15:27year you either have a bad year when
15:29you're just trading badly and that's
15:31when I was early trading so 2009 trading
15:34badly wasn't seeing the market right. I
15:36would have short-term positions. I kept
15:37getting stopped out all of that stuff. I
15:39kind of gave up all of that. And then
15:41you have a year
15:42uh within a secular trends where you
15:45want to hold on
15:46but you're going to have to go through
15:48pain. 2022 was one of those. I got rid
15:51of a lot of positions but I kept a lot
15:53of the core positions that I wanted for
15:55the long-term secular trend. So I have
15:57long-term positions and I'll have cycle
15:59positions.
16:01So 2022 I kept my long-term positions
16:04and I used the massive sell-off into
16:06November December
16:08uh 2022 where they got to the two
16:10standard deviations oversold on the long
16:12trend and that's when I started adding
16:14all of my technology names uh and
16:16massively upsized in crypto.
16:19And then I hold on.
16:20We've just gone through another large
16:22drawdown. You know, my sweep position
16:23was down 80% from its high.
16:25Yeah, but from its high versus where I
16:28bought it. I prefer to think about where
16:30I bought it. So you know, was I
16:32underwater from where I bought it? Yes.
16:34Did it worry me? Not really. I have
16:36other positions within that. I
16:38technology stocks that have done better,
16:40crypto have done worse and I just deal
16:42with that. If you can't then use stuff
16:44like the weekly trend indicator or your
16:46own variation of that where you can just
16:48reduce risk and add risk. I found over
16:51time it's net depleted. I found over
16:53time that every time you do that doesn't
16:54work. The other thing I found is that
16:57trying to trade the crypto cycle
17:00is I'm just going to take it off at the
17:02top and put it at the bottom. We're what
17:03witnessing it right now. It is literally
17:06impossible to buy the bot bottom in full
17:08size that you took off somewhere near
17:09the high if you were lucky enough to do
17:11it. Or you sell what you think is the
17:13high and it goes up another 10x and I've
17:14done that too.
17:17And I just find it easier to do nothing
17:18and to hold them. That's why I don't use
17:20leverage. I'm I'm a hedge fund guy. I
17:22used to use tremendous amounts of
17:23leverage in currencies and everything
17:24else, but I don't need to. We're blessed
17:26with the greatest trends in the history
17:28of markets.
17:32>> Every crypto cycle produces a day that
17:35tests the people trading it with
17:36borrowed money. The biggest one on
17:38record came on October 10th, 2025.
17:40CoinGlass counted about 19.1 billion
17:43dollars of liquidations in 24 hours
17:46across more than 1.6 million traders
17:49after a US announcement of 100% tariffs
17:52on Chinese imports. CoinGlass has said
17:54the true figure was likely higher
17:55because some exchanges report late. The
17:57October 15th sell-off was a smaller echo
18:00of the same thing. Each of those
18:01liquidated positions was a leveraged bet
18:04that price would hold a level and a fast
18:06market took it out. Raoul has been
18:07through every one of these cycles with
18:09real money on the line.
18:13Put the pieces together and you get a
18:15setup that's uncomfortable to hold and
18:17hard to argue with. The factory economy
18:19has expanded for nine straight months.
18:22The money supply set a record in August.
18:24Strategy and Bitmain, the largest
18:26corporate holders of Bitcoin and Ether,
18:28kept adding through the drawdown. The
18:29people who bought Bitcoin near $15,500
18:33in November 2022 sat through headlines
18:35[music] every bit as ugly as the ones in
18:37this drawdown. It went on to $126,080
18:41and even at $81,000 they're up more than
18:44five times. None of this guarantees
18:46Ether reaches $18,000 or that Bitcoin's
18:49trend holds. The prices index in the
18:51factory data is running hot. The Fed
18:53raised rates in September and a trend
18:55line only describes what has already
18:57happened. A break below the lines Raoul
18:59drew would change the picture. If you
19:01own Bitcoin and Ether for the next
19:02decade, those are the three numbers to
19:04keep watching. The factory index, the
19:06money supply, and whether the biggest
19:08holders keep buying. Whether any of that
19:10adds up to $18,000 Ether is something
19:13the trend will settle over years, not
19:15days. And if you want this kind of
19:16breakdown every day with the data behind
19:18it, join the Crypto Nutshell, my free
19:205-minute daily email. Click the first
19:22link in the description, enter your
19:24email, and you're in. Anyway, guys,
19:26that's all we have for today. Thanks for
19:27watching, and I'll see you all in the
19:29next video.

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