Former Goldman Sachs executive Raoul Pal believes that Bitcoin (BTC) will rally in the coming months on the back of a weakening US dollar.
Pal tells his 1.1 million followers on the social media platform X that he thinks policymakers will methodically debase the US dollar to manage debt payments.
According to Pal, the dollar debasement will trigger a surge in global money supply and benefit risk assets like Bitcoin and crypto.
“Everyone needs and wants a weaker dollar to service their dollar debts. No one wants it to move too fast (it blows up value at risk), but they need it lower over the next 12 months. This is the purest form of global liquidity and is the largest driver of global M2 currently. The US knows this too and is a key part of trade negotiations, especially with China.”
To support his bullish stance on Bitcoin, the macro guru says that total global liquidity has an 87% correlation with BTC. He also points out that Bitcoin rallied hard five years ago due to currency debasement.
“See 2020 for details. Recession and rising liquidity = stronger BTC.”
Pal shares a chart showing that Bitcoin tends to follow the rise and fall of global liquidity, with the latter having a 12-week lead.
Maybe, just maybe, it was this easy all along.
IF this works, it will definitively prove that liquidity is THE dominant factor still in markets. Not tariffs. Not politics, Not rates. Not (insert your narrative).
At time of writing, Bitcoin is trading for $93,570. Meanwhile, the US national debt stands at $36.214 trillion.