Former Goldman Sachs executive Raoul Pal says that the bottom for Ethereum (ETH) is likely already in and a crypto bull run is now around the corner.
The macro guru says those skeptical of the industry following the collapse of crypto exchange FTX are forgetting Bitcoin’s (BTC) historical performance and network growth.
He says it’s dark times like these that typically precede big price increases.
“But this tiresome ‘Scam! Ponzi’ nonsense hides the fact that the network growth in BTC (taken from using the low to low) is 125% per year, which is astonishing growth. Each ‘Scam! Ponzi!’ low leads to very large price increases (unlike any other asset) as liquidity comes back and the network keeps growing.”
Pal says there is a strong correlation between the M2 money supply and risk assets like crypto. According to the macro expert, an expansion of the global money supply and a wave of liquidity will appear once more.
“Liquidity will soon turn… you don’t need a super cycle of liquidity like 2020, just a positive cycle for crypto to perform as the network keeps growing.”
Setting his sights on Ethereum, Pal says the bottom mostly like hit in June, and that ETH is gearing up to once again outperform Bitcoin in another bull cycle.
“In the last cycle, ETH became dominant as its network effects grew faster and its returns were even larger than BTC… roughly twice the increase.
Here we are again… somewhere near the bottom of the cycle (ETH probably bottomed in June) and the lows of despair are pervasive as everyone loses their minds, just as they did at the bottom phase of each previous cycle but the network keeps growing over time.”
At time of writing, Ethereum is changing hands at $1,240.
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