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Macro guru and Real Vision CEO Raoul Pal joined the Ark Invest’s virtual Big Ideas Summit 2022 where he appeared alongside Cathie Wood, Peter Diamandis. David Liu and other special guests.
Discussing the inflation, the cryptocurrency market and Bitcoin in the “Takeaways with Special Guest Raoul Pal”, Pal tried to predict the effect of the inflation rate on market expectations and sees a change in narrative. In his interview with ARK’s crypto analyst, Yassine Elmandjra, he said:
“Why we’re seeing volatility right now is the shift of narratives. Markets don’t like that shift. The narrative was the inflation shift. The inflation shift last year. I think what happened is inflation was real and inflation destroyed marginal spending and marginal investing and I think we saw it in meme stocks.
We’ve seen across the market, we’ve seen it in cryptocurrencies where the marginal investor got marginalized because they didn’t have enough money. I think that was one of the features of what happened and the bond market was pricing in some more inflation, but not a great deal.”
Pal believes that the economy has a long way to go to get back on its feet and that intervention might be needed, stating:
“My general view, and I’ve held this for a while now, is that the central banks are more likely to get away with one hike, two hikes max before they’re looking at stimulative measures again because I don’t think the economy has got traction and we don’t know what the true traction is of the economy until maybe two years, three years after the pandemic recession has followed through.”
Current volatility in the markets aside, Pal noted that the inevitable interventions from central bank and government show to be bullish for crypto and Bitcoin: monetary policies that will be bullish for crypto.
“Very typical of every recession I’ve ever followed is basically there is a growth slowdown that comes fast afterward. The market panic starts talking about recession again. Usually, that doesn’t happen. There’s generally more stimulus, so I think it’s very supportive of crypto prices overall.
I think crypto has gone through that transition phase. We saw the marginal spending, investing in crypto go down. I think now all I’m doing is speaking to large institutions about investing so I think the ongoing investment thesis continues and I think that the central banks will be more dovish than people expect going forward so we should have a longer cycle with more tailwinds than most people expect right now.”
A day after the summit, Pal went to Twitter and told his 800,000+ followers of the lack of business acumen with the U.S. Federal Reserve.