In a recent interview, prominent macro investor and Real Vision CEO Raoul Pal made a bold prediction, suggesting that the next crypto bull market will likely kick off in the second quarter of 2024. Pal’s forecast centers around the upcoming Bitcoin halving event, but he emphasizes that macroeconomic factors will be the primary drivers of this anticipated uptrend.
Pal notes that the Bitcoin halving cycle tends to coincide with specific macroeconomic conditions, primarily characterized by monetary expansion and low-interest rates. According to him, these macro factors have dominated previous halving events, creating a conducive environment for cryptocurrency price surges. While Pal acknowledges that the halving narrative might be overstated, he underscores that it continues to drive market sentiment effectively.
One of the key catalysts Pal points to for the crypto market 2024 is the likelihood of central banks further reducing interest rates and potential fiscal stimulus measures, particularly in the lead-up to the United States presidential election. However, Pal refrains from making specific price predictions, citing the scrutiny that often accompanies such forecasts.
Arthur Hayes’ Crypto Bull Market Prediction
On the flip side of this prediction, Arthur Hayes, the former CEO of BitMEX, has offered an alternative perspective. In a recent tweet, Hayes drew attention to the surging U.S. Treasury yields as a potential precursor to a new bull market for Bitcoin and cryptocurrencies. He highlighted the concept of a “bear steepener,” which signifies a scenario where long-term interest rates rise more rapidly than short-term rates.
Hayes argues that the current steep rise in the 2s30s curve (the difference between 30-year and two-year yields), combined with increasing long- and short-term interest rates, is exerting significant pressure on the overall economy. He contends that banks, due to their portfolios’ leverage and non-linear risks, are likely to sell bonds or pay fixed rates as interest rates continue to rise. This selling pressure, in turn, could lead to further declines in bond prices.
Hayes suggests that these economic dynamics will inevitably result from a return to massive liquidity injections, countering the quantitative tightening observed since late 2021 and potentially reigniting the crypto bull market.
However, Hayes cautions that such a transition may not be without casualties along the way. As U.S. government bond yields hit 5% this week for the first time since August 2007, the global financial landscape appears to be at a critical juncture, with significant implications for the cryptocurrency market.
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