Crypto Cycle Still Mid-Phase, Says Ex-Goldman Sachs Exec

Raoul Pal, the former Goldman Sachs executive who now runs Real Vision, said the crypto market's recent slide is a liquidity-driven pullback, not the start of a bear cycle. He argued that global excess liquidity has turned positive again and that capital will rotate back into digital assets.

Pal attributed the downturn to a period when excess liquidity dried up across global markets. Money flowed into artificial intelligence stocks instead. That phase is ending, he said.

"If there's no excess liquidity, it will find its home in the most compounding place," Pal said. He pointed to improving M2 and broader monetary measures. "We've got excess liquidity, and this helps us."

He described the current phase as mid-cycle, not a peak. Bitcoin's log regression channel supports that view, he said. The asset trades near 1.5 standard deviations below fair value, a level that in prior cycles – 2015, 2018, and 2022 – marked accumulation zones before rebounds. Bitcoin was near $59,500 on June 26, according to data Pal cited.

Pal also noted that the Rainbow Chart places Bitcoin below its lowest sentiment zone. He said Ethereum's monthly DeMark indicators show a reversal setup, and that the SUI token trades around 1.8 standard deviations below its trend channel. He concluded that "the risk-reward on an adjusted basis is extremely high."

He contrasted crypto with semiconductor stocks, which he called overbought. He estimated the semiconductor trade at roughly 3.8 standard deviations above trend. AlphaScala's Alpha Score for NVIDIA sits at 65/100, reflecting the elevated positioning Pal described.

Pal confirmed he continues to focus on Ethereum, Solana, and SUI. He sees these networks as coordination layers for digital economies. He also argued that artificial intelligence systems will depend on blockchain infrastructure. "AI and crypto are married at the hip," he said, explaining that AI agents need programmable transaction layers.

He said he has reduced exposure to high-growth equities and semiconductors and shifted capital toward undervalued layer-one assets. The main driver of crypto prices, he said, is global liquidity. Bitcoin maintains an 85% to 87% correlation with liquidity trends, which have been rising since 2022.

A strong U.S. dollar currently limits liquidity expansion, Pal said. He expects interest rates to decline, which could weaken the dollar. "The dollar's too strong, and I think that changes," he said. Lower rates would increase available capital and support crypto demand, he added.

Pal said he continues accumulating positions based on his long-term framework. He expects asset leadership to rotate in the next market phase.

For more on the macro backdrop, see our crypto market analysis and the Bitcoin profile.