Bitcoin’s network effect is still being underestimated
Macro researcher Raoul Pal has compared Bitcoin’s current stage of development in 2025 to Google’s position in 2017 — a moment when the company was already dominant, yet its full network potential was still far from realized.
According to Pal, Bitcoin should be seen as a mature but still fundamentally undervalued network, where real-world adoption is expanding faster than traditional financial models are able to price it in.
Ethereum may still be earlier in its cycle
While Bitcoin already plays the role of a global digital reserve asset, Pal believes Ethereum is even earlier in its development curve. Because of this, its potential upside could be greater, especially as tokenization, DeFi, and on-chain activity continue to expand.
In his view, both networks are driven by growing user participation rather than traditional profit metrics.
Crypto follows the same logic as big tech networks
Pal compares the crypto ecosystem to companies such as Google, Meta, and Amazon, which created value not through immediate profits, but through expanding networks of users, data, and activity.
This idea aligns with Metcalfe’s Law, which states that a network’s value increases exponentially as more participants join it. In this framework, adoption, not revenue, becomes the primary engine of long-term growth.
Liquidity cycles and the “banana zone” theory
Raoul Pal is widely known for his concept of “banana zones” — explosive growth phases driven by global liquidity cycles. He argues that crypto markets tend to move in parabolic trends when liquidity conditions align with accelerating network adoption.
As more capital flows into digital assets and more institutions integrate blockchain-based infrastructure, these cycles are becoming stronger and more visible.
What this comparison means for investors
If Bitcoin truly mirrors Google’s 2017 stage, it suggests that current valuations may still reflect an early chapter in a much longer adoption story. ETH, in Pal’s view, could represent an even earlier opportunity within that same framework.
Rather than focusing only on short-term price movements, this perspective encourages investors to pay closer attention to structural signals: wallet growth, network usage, transaction volumes, and real-world integration.
