Pal Likened Current Market Movement To Cycle 15-16

Former Goldman Sachs executive Raoul Pal recently made some important predictions about the markets. Pal says in a new interview with Nathaniel Whittemore that crypto is setting the stage for a massive price explosion.

The next six months, crypto is very strong. I don’t think this is a repeat of 2019, a longer period of pullback as global central bank balance sheets shrank for a while. We’ll probably speed up as we know what’s going on in the world and where it’s headed. I think it’s more like the 2015-16 cycle; a big uptrend, which I think we’re still in the middle of, then another five months or so long sideways correction, and then a higher boom when you start to see central banks really kick in.

Pal also says that the venture capital (VC) investment that poured into the space during the bear market, along with product development, is likely to result in innovations that will increase crypto adoption.

But more importantly, there was a lot of money going into the space in VC and a lot of people developing products. So, I expect adoption to increase rapidly. So which area will explode this adoption? It can come from anywhere. It can come from the gaming industry. It can come from digital identity. It can come from brands in the NFT and Web3 space. It can come from DeFi. I don’t know. But it’s coming. That’s why I think this is very interesting.

The former Goldman Sachs executive also believes that hedge funds will start investing in crypto, pumping significant liquidity into the markets.

The fascinating thing is that the global hedge fund industry on TradFi is $3 trillion. These are all pension fund money, government wealth fund money, high net worth and individual retirement accounts. The digital asset hedge fund, i.e. the sum of all crypto hedge funds, is about $5 billion. That’s about 1% of the size. So I think we’re going to see a lot of capital flowing into this space, appropriate capital, not just retail capital, but sticky, long-term megacapital flowing into the space needed. Secondary markets are illiquid, which is why they are so volatile.