Here’s when risk assets like Bitcoin and Crypto will tear higher, according to macro analyst Raoul Pal
Former Goldman Sachs CEO Raoul Pal says the macro backdrop is starting to look attractive for risk assets like Bitcoin (BTC) and crypto.
In a recent ask-me-anything (AMA) session on Real Vision, Pal says investor sentiment is extremely fearful at the moment, and that could be the catalyst for risk assets to pull off an unexpected rally.
“The pain trade, I think, is to make everyone believe there’s a big big crash coming, the ‘I told you so’ moment, and earnings are going to be revised lower.” All I know is that people are record negative emotions. They are more negative than I have ever seen in any history… They are super negative. People are super insured. The pillow volumes have been incredibly high.
So I think the path of pain is to go lower, suck more into short and then rip higher. That would tear higher because bond yields begin to fall as they finally begin to reconnect for the business cycle. Bond yields have detached massively from the ISM (Institute for Supply Management) survey. It is a relationship that has gone back 50-60 years.”
According to Pal, the bond market is broken as sellers are currently overwhelming buyers, but the macro expert says the setup could motivate the Federal Reserve to finally loosen monetary policy.
“It is now a function of illiquidity because nobody is involved in the market and there are only sellers. I think it’s going to cause huge problems. That will eventually create the answer, and the answer to everything is always more cowbell. Britain showed it: more cowbell, print more money [and] get us out of this problem.
When people say they will keep going until it breaks, well when it breaks more cowbell. The whole system is now set up for one cry that is more of a cowbell, turn the taps back on.”
Pal highlights that when central banks turn the taps back on, that’s when assets like Bitcoin and crypto can rise.
“It’s a sad state of affairs, but that’s how it is, but you can change it to your advantage. Trading to your advantage is understanding when that shift is coming and what it does to risk assets. It’s very attractive.”
I
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered straight to your inbox
Check price action
Follow us on TwitterFacebook and Telegram
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making high-risk investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and trades are at your own risk and any losses you incur are your responsibility. The Daily Hodl does not recommend the purchase or sale of cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Dotted Yeti/Chuenmanuse
