Former Goldman Sachs executive Raoul Pal says that he’s seeing a developing macro setup that could potentially blast Bitcoin and other crypto markets into the stratosphere.
In an interview with The Breakdown host Nathaniel Whittemore, Pal explains how a weak global economy could serve as a catalyst for the growth of the digital asset market.
“The macro setup is, I think, global growth comes out weaker for the next nine months. And I think that the Federal Reserve, even if they talk about tapering, will end up accelerating QE [quantitative easing]. That’s how I think this plays out. That’s what the bond market is telling you. Once crypto markets sniff this out, they’re going to explode. What we’ve got is a macro that’s potentially there.
Macro stories develop slowly. They’re not quick narratives. It’s month-by-month data. So we will see this over the next three months. But we will probably have a global slowdown.”
According to Pal, the slump in the global economy could force some of the largest central banks to cut interest rates or engage in another round of money printing.
“We’ll probably have the Bank of Japan having to print for the reasons we’ve just talked about – that Japan’s totally screwed up the virus. They will do it in size. Chinese economy is in the toilet right now. They will probably do something. So we’ve got stimulus coming from Asia. Do the Fed do more? Do the Europeans do more? Generally, they have. They’ve generally cut rates twice after every recession. So they’re likely to do it again for a number of technical reasons.”
The macro guru says that the combination of loose monetary policies and crypto’s sound money properties offers the “perfect setup” for the continuation of the bull market.
“So we have rate cuts, and this perfect setup with no supply, and demand in the middle of an exponential bull market. You don’t get these often in your life.”
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