Macro investor Raoul Pal is convinced that the current crypto bear market will only end when the Fed eases its tightening monetary policy by halting rate hikes. That could happen in the next few months, according to Pal’s predictions.
“It’s unlikely the Fed will hike rates as far or as fast as people are expecting. My guess is that they’ll probably stop raising rates sometime this summer, and that will be it,” he said in an exclusive interview with Cointelegraph.
Pal sees the combination of high interest rates and fears of an impending recession as the key macro factors causing the current crypto bear market.
“Retail investor income hasn’t risen as much as prices, so they’ve lost discretionary income. So people can just average fewer dollars and commit less,” he said.
Pal believes that the bottom of the market is not yet in and that a mass liquidation phase involving crypto and legacy assets could be coming soon.
“[Crypto] “could eventually see a surge in liquidation if we see one in stocks, and that will eventually be the market’s ultimate capitulation,” he said.
At that point, according to Pal, the Fed will ease monetary policy, injecting some liquidity into financial markets and thus triggering the next crypto rally.
“We’re going to see a bond rally, a crypto rally, and maybe some of the tech stock rallies,” Pal said.
Aside from the macroeconomic picture, other factors that could facilitate the next bull run include the approval of a bitcoin spot ETF and Ethereum’s switch to a proof-of-stake system, which is expected in Q3.
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https://cointelegraph.com/news/how-long-will-the-crypto-bear-market-last-raoul-pal-s-macro-analysis How long will the crypto bear market last? Macro analysis by Raoul Pal