Marco guru and CEO of Real Vision Raoul Pal says that the crypto markets have already hit their lows and the looming catalysts could trigger the next industry-wide rally.
in a new interview With Layah Heilpurn, Pal says that many different developments have flooded the crypto space with negative sentiment, but markets have remained resilient.
According to him, resilience can be a sign that the bottom has been reached.
"The balance of probabilities is that we did the bottom last year, we retested the bottom this year and I think the bottom is at...
I think we launched a war, 8.5% inflation, the Federal Reserve raised interest rates, everything in crypto, we launched the Chinese ban, we launched so much, and we didn't make a new low. Usually that is usually a sign that the market has bottomed out.”
Pal says that a period of economic stagnation could be the spark that sets off the next big bull run in crypto.
“Now we are looking at what are the bullish catalysts [are]. The catalyst to the upside would be if economic growth starts to slow. We're likely to see long-lived assets, things that tend to outperform in low-growth environments, and cryptocurrencies tend to do very well in that kind of environment, just like Cathie Wood's ARKK does, that kind longer-term assets. That is what we are looking for as a spark, a change in the structure so that people fear inflation less and start fearing growth more.”
According to Pal, the previous four-year cycle powered by Bitcoin cut in half the one that best described the general trends of the crypto market has already ended.
"I think [4-year cycles are] it ended because the market is much bigger than it was and bitcoin is not as dominant so at the margin the four year cycle will have an impact but not as big. For example ETH 2.0 is going to create a potential dynamic that is different so I think the cycles have changed and I think over time these very volatile trends become less volatile and we saw that with Amazon in its early days... It's the same thing with crypto now, there's 300 million people using it now, so what's happening is the volatility goes down."
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