Raoul Pal provides a macro analysis of the Crypto Bear Market.


Raoul Pal, CEO of Global Macro Investor, predicts a “bad recession” and “big liquidation” in the coming weeks as the Fed continues to tighten monetary policy. He believes that the current cryptocurrency market panic is similar to a bear market in June 2021 and a flash crash in March 2020.

Fed Impact

on twitter line On Thursday, Pal argued that global markets were taking a hit, not just cryptocurrencies in general. “Demand is shrinking due to the largest austerity policy in history,” he said. “As house prices fall, layoffs are coming.”

Last week, the Fed announced a 0.5% rate hike. This is the largest monthly increase since May 2000. Cryptocurrency and stock markets are collapsing in the aftermath, and Chairman Jerome Powell has promised several corresponding raises in the coming months.

Pal argues that the stock market has already set a price and that the credit and bond markets are just getting started. He believes oil prices are bound to fall, which will be an “excuse” for the Fed to stop tightening until July.

But he thinks it will be very bleak in the short term.

“The next four weeks will be very unsettling, with all positions canceled and shootings,” he wrote. “There will be no safe place to hide (except bonds – most people run out of bonds).”

Encryption in “Full Panic Mode”

Cryptocurrencies are no exception, and Bitcoin currently costs less than $30,000. Recently on BitStamp, it fell to a low not seen since December 2020, and both Terra and TerraUSD completely collapsed.

As Pal said, the crypto market is in “complete panic mode” and “monkeys” (possibly referring to Bored Ape NFT holders) are busy “throwing shit at each other.” The CEO uses Bored Ape as his Twitter profile picture.

Nonetheless, Pal calls cryptocurrencies a “long-term investment” rather than a trade, and sees the upcoming recession as “a huge opportunity”.

Investors are known for their extreme interest in Ethereum becoming the so-called “Internet of Value”. He concluded that he would take this opportunity to buy more cryptocurrencies that have recently fallen below $2000.

Cardano founder Charles Hoskinson believes that the cryptocurrency market has entered a “street panic” phase and it could take months to start recovering.

Nevertheless, MicroStrategy CEO Michael Saylor remains bullish on Bitcoin. calling “Best Inflation Hedge” on Thursday. The recent downturn has submerged the company’s overall Bitcoin position.

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