Real Vision CEO Raoul Pal has made the case that Ethereum is wildly undervalued, arguing that markets have not properly priced the risk associated with the network's critical role in crypto infrastructure.
During a recent podcast appearance, Pal presented a stress-test scenario in which Ethereum going offline would result in severe market damage. Under his analysis, such an outage would impact 70% to 76% of stablecoins and a similar proportion of decentralized finance protocols. The cascade would extend to real-world asset tokenization, the digital art market, and every Layer-2 network built on Ethereum.
Pal estimates the total damage from such an event would fall between $1 trillion and $1.5 trillion. He argues that the market has not reflected this concentration risk in Ethereum's valuation.
"Now there is demand for Bitcoin as a collateral asset. We know that. But the convexity of, you know, something like ETH, I don't know what the size of ETH is now, what its market cap is, but it's wildly undervalued versus, you know, what is coming," Pal said.
Investment Strategy and Holdings
Pal holds Bitcoin, Solana, and Sui alongside Ethereum. His investment approach, which has remained consistent for two years, focuses on buying assets that fall two standard deviations below their long-term trend.
He cited his 2022 purchases of Ethereum and Solana near their lows as examples of this strategy in action. Pal noted that selling near market tops and buying back lower is "psychologically impossible," suggesting a buy-and-hold approach works better for long-term investors.
He also holds Zcash, citing rising demand for privacy assets. Sui's economic density, in his view, has helped it withstand recent market pullbacks.
Broader Market Outlook
Pal attributes crypto and tech underperformance in recent years to capital flows toward AI infrastructure rather than weakness in the sectors themselves. He believes rate cuts and renewed capital spending could redirect liquidity back into crypto.
Pal forecasted a $10 trillion crypto market within 18 to 24 months and suggested the market could reach $100 trillion by 2035, driven by stablecoin adoption, AI investment, and tokenized assets. He expects stablecoin supply could reach $1 trillion within three to four years as institutions move more assets on-chain.
Bitcoin, in his assessment, still trades below its long-term trend and appears undervalued relative to tech stocks, though weak liquidity could delay a rally.
