Marco guru and Real Vision CEO Raoul Pal says that the crypto markets have already seen their lows and that looming catalysts could spark the next industry-wide rally.
In a new interview with Layah Heilpurn, Pal says that many different developments have showered the crypto space with negative sentiment, yet markets have remained resilient.
According to him, resilience may be a sign that the bottom is in.
“The balance of probabilities is that we made the low last year, we retested the low this year and I think the low is in…
I think we’ve thrown a war, 8.5% inflation, the Fed raising interest rates all at crypto, we’ve thrown the Chinese ban, we’ve thrown so much at it and didn’t make a new low. Usually, that’s usually a signal the market has found its bottom.”
Pal says that a period of economic stagnation could be the spark that triggers the next big bull run in crypto.
“Now we’re looking for what the upside catalysts [are]. The upside catalyst would be if economic growth starts slowing. We’re likely to then see long-duration assets, things that tend to outperform in low growth environments, and crypto tends to do very well in that kind of environment, much like Cathie Wood’s ARKK does, those kinds of longer term assets. So that’s what we’re looking for as the spark, a change in structure so people fear inflation less and start fearing growth more.”
According to Pal, the previous four-year cycle driven by Bitcoin’s halvings that best described the crypto market’s overall trends is now over.
“I think [4-year cycles are] over because the market is much larger than it was and Bitcoin is not as dominant so at the margin, the four-year cycle will have an impact but not as large an impact. For example, the ETH 2.0 thing is going to create a potential dynamic that’s different, so I think the cycles have changed and I think over time, these very volatile trends get less volatile and we saw that with Amazon in its early days… It’s the same with crypto now, there’s 300 million people using it now so what’s happening is the volatility dampens.”
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