A popular macroeconomic expert thinks the world is going through a recession period but remains confident that cryptos will be a viable investment class in the long term.
In a new interview with the Investopedia Express podcast, Real Vision CEO Raoul Pal tells host Caleb Silver that the Federal Reserve’s recent decision to raise interest rates will further damage a reeling economy.
“My macro view is that we’re in recession, it’s going to be pretty nasty.
The Fed shouldn’t have done what they did but the bond market tightened for them anyway – the Fed didn’t actually do it, the bond market did it all. The Fed are going to have to unwind this mess, but it could get messy at first.
Using all the technical indicators that I look at, my view is if we are going to reach a proper bounce or a low, it happens in June. So we’ve got between now and June for everyone to freak out.”
Regarding the fate of cryptos within the broader economic turmoil, Pal suggests that leading smart contract platform Ethereum (ETH) has held up relatively well in the face of inflation and the international sanctions fallout after Russia invaded Ukraine back in February.
“It is like a teenager, but let’s face it – Ethereum’s down like 40% this year and the Nasdaq’s down 25%. It’s not terrible, and Ethereum for example hasn’t made a new low versus last year while we’ve thrown in inflation and rate hikes and wars and everything at it.
I don’t think we’ve gotten the massive blow-off top. We’ve got a sort of blow-off top, and I think we’re in this very wide sloppy range.”
The macro investor is confident in Bitcion and crypto’s long-term prospects and cites inflation as the reason retail investors are not currently flocking to the space.
“The space is not going away. The central banks are building digital currency rails. Everybody’s building everything.
We’re in this period where retail investors couldn’t afford to dollar cost average anymore because their pocketbooks got his by negative real earnings. Their wages didn’t go up as fast as inflation, so they have to spend it at the supermarket and not crypto.”
The Macro Vision founder concludes his crypto talk by mentioning how despite the wild price swings that Amazon’s early investors endured, long term the company has been quite profitable.
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