Raoul Pal said liquidity should extend past 2027 on the capex supercycle and bond issuance.
- Raoul Pal said on Friday crypto’s recent drawdown was a "mid-cycle fall," not the end of a full cycle.
- He said a leverage flush still has to come before the market can really move higher.
- He said the "economic singularity" arrives around 2030, when AI agents become a productive population.
Global Macro Investor founder Raoul Pal said on Friday that crypto's drawdown was a "mid-cycle fall and not a full cycle," and that the market's biggest move would come later this decade, when AI agents push the economy into an "economic singularity" around 2030.
In an interview on the Crypto Insider podcast, Pal explained that the current setup resembled 2019 and 2020, when Bitcoin traded flat for months before the rally that took it to record highs in 2021, trading above $65,000 in November of the year.
He said the four-year cycle fooled people. Traders waited for one last dip that did not come, and the buying since has come from those who missed it. He added one caution, however. A quick leverage flush still has to happen before the market can really get going, according to Pal.
Why Bitcoin Lagged?
Liquidity is driving both, not the headlines or the earnings, according to macro investor Raoul Pal. “Bitcoin is 87% correlated with global liquidity; the Nasdaq is 97% correlated.” That gap explains part of the split this year. The Nasdaq Composite (IXIC) has gained 16.46% year-to-date. Bitcoin fell almost 4% over the same period. Liquidity makes Bitcoin swing harder, said Pal, because it’s young, volatile and emotional. “It is running cold," he said.
The token peaked above $126,000 in October last year, and has spent 2026 well below that level, trading flat, before reaching an eight-month high last week.
Liquidity grew in the US but not by much, he said. Measured against gross domestic product (GDP) growth, excess liquidity was barely positive and often slightly negative. That left enough capital to fund one trade, and that trade was AI. "AI has paused, and crypto's gone," Pal said. He described the move as a rotation rather than fresh money entering the market.
Liquidity Runs Past 2027
The debt cycle would normally put liquidity into the first half of 2027 before stalling, Pal said. He thinks it will run longer this time. Two things will extend it, according to Pal. The government has been issuing its debt at the short end of the curve, and the AI capex supercycle needs funding of its own. That gives the market two sources of liquidity rather than one. He said traders should watch the dollar above all.
A weaker dollar was the signal, he said, and that is when crypto and gold tend to move.
The Singularity Trade
Beyond the liquidity cycle, Pal said the growth engine changed. He called AI and robots "digital immigrants," a new population joining the “workforce as infinite numbers.” That lifted productivity and let GDP growth outpace debt growth, which was how the debt problem would be resolved. Pal put that turnaround by 2030, calling it the "economic singularity,” and said that GDP growth could reach 20% to 30% in the early 2030s.
Pal said the shift was already visible in company numbers. He said the technology companies stopped hiring three years ago, and that revenue per employee at Meta (META) has since doubled. At Nvidia (NVDA), he said the figure went from $2 million to $10 million per employee, and Amazon (AMZN) began investing in robotics in 2019 and will have more robots than humans working for it by next year.
Crypto, however, was the rail, according to Pal. He said AI agents needed a coordination layer for value and identity, and that blockchains were well suited to it. He said he held Ethereum (ETH), Solana (SOL), and Sui (SUI) for that reason.
Bitcoin’s price was down by 0.5% over the past 24 hours, while the apex cryptocurrency fell from the $ 85,000 range. On Stocktwits, the retail sentiment around BTC remained in the ‘bullish’ zone, while chatter around it stayed at ‘normal’ levels over the past day.
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