Macro Guru Raoul Pal Explains the Absence of a Year-End Bull Run
So what is the reason that crypto markets did not go through the roof in the second half of 2021?
Former Goldman Sachs Executive Raoul Pal sat with Maggie Lake in a new interview on his Real Vision YouTube channel. According to Pal, the relative setback was largely due to retail traders not having enough cash on hand and therefore the expected year-end rally did not materialize.
“Something feels news new… It’s been choppier basically since March to May when Bitcoin topped first, then Ethereum. They really haven’t broken out again. So they’ve been in this big kind of sloppy range that goes up and down a lot. I’ve been thinking about that, because normally at this point in the crypto cycle, you would have seen mass retail participation and this explosive run. I was expecting it, as was many. It hasn’t materialized. Why?
Is there a structural change in the market, or is it because crypto is discretionary spending or a discretionary investment? If you raise prices on people, they have less money – retail participation – to put into crypto.
We have not seen the kind of number of new wallets and all of the other metrics follow when we had the recent high, and it makes me think that people don’t have money to put in.”
Pal does not believe that the outdated dogma of crypto being too risky, is a reason that smaller investors are staying away from crypto is that they see it as too risky. He stressed that most people consider crypto more of a long-term hedge against central bank debasement.
“They do not see it as a risk asset because the narrative is like, this is a long-term inflation hedge. It’s not traditional inflation. It’s actually about central bank debasement.
In the end, we’re talking about inflation that’s running at 6% to 7% a year, but Bitcoin is up by 100% and Ethereum’s up 500%.
It is a long-term method for side-stepping the devaluation of the fiat currency along with, more importantly, a call option on the future technology and web3 and all the new things that have been built.”
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Source: igaming
