Former Goldman Sachs CEO Raoul Pal predicts crypto markets will move out of the bear market faster in the next six months than they did in 2019.
In a new interview with The Breakdown host Nathaniel Whittemore, the macro expert say crypto is paving the way for a massive price explosion.
“Next six months, crypto very strong. I don’t think it’s a repeat of 2019, which was a longer pullback as global central bank balance sheets shrank for a period of time.
Knowing what’s going on in the world and where it’s headed will likely speed us up. I think it’s more like the 2015-2016 cycle, which was a big uptick, which I think we’re still in the middle of, than a long sideways correction for five months or whatever and then another blast higher as you really start to rise see the central banks come into action.”
Pal also says that the venture capital investment (VC) that poured into the space during the bear market, along with product development, is likely to result in innovation that will increase cryptocurrency adoption.
“But more importantly, a lot of money went into space in VC and there were a lot of people building products. So the next phase of what adoption looks like will come. And I don’t know what it is. It can come from anywhere. It can be from gaming. It can come from digital ID. It can come from brands in the NFT (non-fungible token) and Web3 space. It can come from DeFi (decentralized finance). Don’t know. But it’s coming. So I find that very interesting.”
Pal goes on to predict that traditional financial (TradFi) hedge funds will start investing in crypto, injecting a burst of liquidity into the digital asset markets.
“What is fascinating is that the global hedge fund industry is worth $3 trillion in TradFi. That’s all the money from the pension fund and the money from the state fund and high net worth and IRAs (individual retirement accounts).
The digital asset hedge fund, so all crypto hedge funds added together, is about $5 billion. It is about 1% of the size. So I think we’re going to see a lot of capital flowing into space, real capital, not just retail capital, but sticky, long-term mega-capital flowing into space, which is needed. The secondary markets are illiquid and therefore so volatile.”
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