Real Vision chief executive officer (CEO) and co-founder Raoul Pal has given his predictions for cryptoassets in 2021, including the impact of decentralized finance (DeFi).
Speaking in an interview with Nathanial Whittemore, Pal, a former Goldman Sachs exec, said DeFi would play into the current market rally for cryptocurrencies.
Pal explained that ICOs, while troublesome, laid the groundwork for the rise of DeFi products, including tokenization. He continued, saying the industry of DeFi is full of people “working hard on getting it right.”
He said,
I think DeFi will be a feature of this rally. And there will be a lot of projects that fail. But that’s okay again because, and people call them scams blah blah blah, it’s a feature of the nascent part of this space. This is a whole new thing just developing.
Pal also predicted that central bank digital currencies (CBDCs) would become revolutionary financial instruments in the near future.
He said,
And then it’s like, ‘It’s not Bitcoin,’ and the central banks aren’t saying it is, either. What they are telling us is that they are going to change the rules of economics. And the shift is going to be towards behavioral economics and away from traditional economics schools of thought.
Pal said CBDCs would provide innovative incentive schemes that would ultimately benefit bitcoin with the creation of digital on and off-ramps.
He concluded by saying that the stock-to-flow model for bitcoin has “yet to be disproven” and highlighted the importance of BTC’s limited market supply.
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