Macro expert Raoul Pal says that the smart contract platform Solana (SOL) and the stablecoin-focused blockchain payment system Terra (LUNA) could follow the parabolic price development of Ethereum in 2016.
In a new interview with Real Vision, Pal said that due to the cyclical nature of network effects, Ethereum is currently mirroring Bitcoin’s 2017 bull cycle.
“… When I started researching Metcalfe’s Law, I realized that Ethereum was exactly following the last cycle of Bitcoin. And that’s scary. I’ve never seen anything like it. And this analogy predicts a cycle high for Ethereum of $ 20,000. And again, I really think it’s going to break that. “
Source: GMI / Bloomberg
The network effect is the idea that the more users and subscribers a system has, the more valuable a good or service is.
“But I think that if my logic in relation to Metcalfe’s law is correct, then Layer 1 projects will also work. And strangely enough, here is a graph of Solana versus Ethereum in the last cycle when Ethereum was the darling, the new breakout. And the same goes for Terra. It moves in the same way. “
Source: GMI / Bloomberg
The strategist says that even Bitcoin is following its own earlier launch cycles and expects BTC to follow the 2013 rally for the remainder of that bull cycle. Pal says these network effects are currently the main driver of the crypto market.
“When these different protocols were adopted, they all worked the same way. Bitcoin repeats the original mass adoption cycle back in 2013. This is super exciting to me. “
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