Analyst Raul Pal believes the crypto industry is at the “Google of 2017” for Bitcoin, and even earlier for Ethereum (ETH).
In 2017, Google (Alphabet) had already proven its dominance in search and digital advertising, but was far from realizing the full potential of its network (cloud, AI, etc.).
Pal hinted that Bitcoin will be at a similar stage in 2025. Although the network is strong and adoption is accelerating, the full potential has not yet been fully captured.
Ethereum is even earlier in its lifecycle, meaning its network adoption and utility are less mature than Bitcoin. Therefore, the “upward potential” is even greater.
“If it looks like a duck…”
According to Raul Pal, Bitcoin and Ethereum operate like networked platforms. Just as Google, Meta, and Amazon derive their value primarily from user scale and interactions, a cryptocurrency’s value comes from its network effects.
“If it looks like a duck and quacks like a duck, it’s probably a duck…” Pal said.
Metcalfe’s Law states that the value of a network increases approximately as the square of the number of users.
Pal argues that the main factor that creates value for cryptocurrencies is adoption, not cash flow or profits.
Therefore, the more people use Bitcoin or Ethereum, the more valuable the network becomes.
Although Bitcoin’s intrinsic cash flow is limited (no companies issue dividends), the value of the network itself grows exponentially with the number of people who adopt it as money, store of value, or collateral.
The companies mentioned above are also network-driven. For Google, that value comes from an ecosystem of users, advertisers, and data. In the meta, network effects come from social media users.
Importantly, these are platforms where the size of the network determines much of the value, not just profits and traditional balance sheets.
According to Pal, cryptocurrencies fit this model “almost by definition,” so treating cryptocurrencies like traditional cash-flow businesses misses the core driver of value.