Raoul Pal Looks What’s Ahead Amid The Latest Crypto Market Crash
According to Raoul Pal, an economist and investment strategist, the global markets are in for a few more weeks of havoc, before the Federal Reserve begins reversing its recent monetary policy.
Pal, who is the Founder and CEO of Global Macro Investor and Real Vision, projects a “nasty recession” and “liquidation writ large” within the coming weeks, as the Fed continues tightening its monetary policy.
According to Pal, the current panic within the crypto markets has a lot of similarity to sentiment during the bear market of June 2021, and the crash of March 2020.
Fed’s monetary tightening
Pal argued in a Twitter thread that global markets across the board are in for a beating – not just crypto. He wrote: “Layoffs are coming, as are house price falls,” making a case that demand is collapsing because of the “largest monetary tightening in history.”
Last week, the the U.S. central bank announced a 0.5% interest rate hike, which represents the greatest monthly hike in 22 years. Both the crypto and stock markets have seen crashes in the aftermath, with chairman Jerome Powell promising multiple equivalent hikes in the coming months.
According to Pal, the equity markets have already priced this in. Both credit and bond markets are just starting to do so. Regarding oil, the economist believes, is bound to break lower, which will provide the “excuse” for the Federal Reserve to quit tightening by July.
Nevertheless, the near term will be quite bad, Pal says:
“The next 4 weeks are going to be highly unsettling as every position gets taken out and shot. There will be no safe place to hide (except bonds – but most people are short those).”
Crypto market in “full panic mode”
With the price of Bitcoin fallen below $30,000, crypto market doesn’t look any better. Bitcoin recently fell down to levels last seen in December 2020. Terra and TerraUSD look doomed, and most of the altcoins are down double digits.
According Pal, the crypto market is in “full panic mode”, with the “monkeys” (Bored Ape NFT holders) busy “flinging poo at each other”.
Regardless, Pal says that he sees crypto a “long-term investment” instead of a trade, and views the incoming recession as a “huge opportunity”. Crypto analyst Michael van de Poppe earlier made similar remarks.
Pal is famous for his extreme interest in Ethereum becoming the so-called “internet of value”. He concluded that he’ll be taking this opportunity to purchase more ETH, which is currently trading at $2,030, down 26% on the weekly chart.
