Raoul Pal Predicts Cryptocurrency Surge as QT Concludes and Global Stimulus Resumes

A considerable tightening in U.S. dollar liquidity is exerting pressure on crypto markets, leading Bitcoin (BTC) to dip to its lowest in five months at around $99,000.

Despite these challenges, renowned macro analyst Raoul Pal assures investors that a significant wave of global fiscal and monetary stimulus is approaching, setting the foundation for a swift recovery in the crypto realm.

Pal and Hayes Highlight Liquidity as Crypto’s Next Major Trigger

Pal’s optimistic perspective stands out, particularly as the market grapples with significant setbacks. At the time of this article, Bitcoin was valued around $102,500, marking a drop of nearly 10% over the past week and about 18% over the last month. Ethereum (ETH) too faced a decline nearing 30% in the same timeframe, according to data from CoinGecko.

Nevertheless, Pal is confident that this upheaval is only a temporary phase, referring to it as a “window of pain” preceding an influx of liquidity. His bullish view is hinged on the impending conclusion of quantitative tightening (QT) and the forecasted resurgence of fiscal expenditure as the U.S. shutdown draws to a close. He indicated that approximately $10 trillion in government debt needs to be addressed within the next year, dubbing it “the only game in town.” As Treasury expenditures recommence, expected to fall between $250 billion and $350 billion, liquidity is anticipated to increase, thus weakening the dollar and bolstering risk markets.

Pal also foresees that the forthcoming CLARITY Act, which aims to establish clearer regulations for cryptocurrencies, could facilitate broader institutional acceptance. Coupled with potential interest rate reductions, bank balance sheet regulations (SLR) adjustments, and global fiscal stimulus from nations like China and Japan, Pal envisions a cohesive macro environment evolving toward the 2026 U.S. elections, which he believes are structured to “stimulate the economy.”

Pal’s enthusiastic forecast is echoed by BitMEX co-founder Arthur Hayes, who connected Bitcoin’s downturn to an 8% contraction in U.S. dollar liquidity since July. He noted that liquidity is expected to rebound once Treasury balances diminish following the shutdown, leading to a rise in BTC values. Hayes also advised in his latest Substack publication that investors should prepare for a “volatile market until discreet quantitative easing (QE) commences.”

Market Remains Delicate but Macro Outlook Improves

The liquidity crunch has heavily impacted digital assets, resulting in the market losing nearly $400 billion this week, which at one point reduced total capitalization to approximately $3.2 trillion. However, despite this turmoil, analysts argue that the sell-off appears to be technical rather than fundamentally driven, caused by leverage and forced liquidations rather than a decline in demand.

Bitfinex Alpha revealed that long-term Bitcoin holders continue to offload roughly 104,000 BTC monthly, reflecting profit-taking instead of panic. Institutional traders remain vigilant, poised for clearer indicators following the Federal Reserve’s rate cut in October.