A bleak crypto future: Former Goldman Sachs Exec predicts tight rules and oligopoly

by Arthur · March 29, 2023

Real Vision CEO and former Goldman Sachs CEO Raoul Pal recently gave his perspective on the future of the global crypto industry.

Before founding the macroeconomic and investment strategy research service Global Macro Investor (GMI) in 2005, Pal co-managed the GLG Global Macro Fund in London for the global asset management company GLG Partners (now called “Man GLG”). Prior to that, Pal worked at Goldman Sachs, leading the European equity and equity derivatives hedge fund sales business. He is currently the CEO of the financial and business video channel Real Vision, which he co-founded in 2014.

Pal envisions an environment where the sector becomes subject to stricter regulations. In the US, he predicts that a small number of large players will emerge, integrating with traditional finance and creating an oligopolistic market structure. Meanwhile, Pal expects there to be only one or two dominant players in Asia, backed by the Chinese Communist Party and targeting the Global South.

He also foresees the emergence of a global regulatory arbitrage regime that bridges the gap between the US and Asian markets, eventually surpassing both in size. This projection mirrors the current financial system, which is shaped by geopolitics, technology and other economic forces. In Pal’s view, capital is adaptable and will always find ways to navigate these changing landscapes.

In another thought-provoking chirping, Pal touched on the difficulties society is experiencing in keeping up with the rapid advances in artificial intelligence (AI) and its applications. He claims that this match can be attributed to the first real example of Reed’s Law in action. Reed’s Law states that the utility of large networks, especially social networks, can scale exponentially with the size of the network.

Pal warns that as other new technologies such as the Internet of Things, robotics, genome editing, blockchain, space exploration and 5G and 6G networks begin to intersect, the world will become even more chaotic. All of these developments fall under the same Reed’s Law umbrella. As they continue to evolve, individuals and organizations will find it increasingly challenging to keep up with the furious pace of innovation.