Macro guru and Real Vision CEO Raoul Pal is shedding light on some of the catalysts he believes could spark a new bull run in the crypto market.
In a lengthy thread, Pal tells his 846.000 Twitter followers that he believes the recent stagnancy of the crypto markets could be the result of retail investors lacking disposable income due to a rise in the cost of living.
“My view is that the key reason the market has seen less retail activity is that wages are rising slower than CPI [consumer price index]. The cost of living has gone up dramatically and that has removed the marginal investor from crypto. They just can’t afford the disposable income.”
Since retail investors have been pushed out, the former Goldman Sachs executive says that institutions other large players will have to be the ones to finally move the crypto markets. He predicts this happens sometime in Q1 of 2022.
“I don’t see stable economic growth and lower inflation for a while, so we are going to have to rely on institutions and hedge funds to allocate meaningful capital. I think that is coming and Q1 should confirm that indeed maybe January, but we have to wait and see.”
According to Pal, institutional and retail investors could ultimately start feeding off each other’s movements, starting a loop of FOMO (fear of missing out).
“New capital will flow in over time and a broader rally, when it arrives, will bring retail investors and a reflexive loop of institutional investors FOMO’ing in. That day will come.”
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