As Raul Pal explains, the weakness shown in the price of Bitcoin (BTC) and other assets is exacerbating the prevalence of “false narratives.” With this premise, the founder of market intelligence company Real Vision urges people to be careful and avoid falling into generalized beliefs that he believes are false in the market.
“The big story is that Bitcoin and cryptocurrencies are broken. The cycle is over. Everything is messed up and we can’t have anything good,” he wrote. According to the investor, this type of view gains traction when prices continue to fall. “This is definitely a fascinating trickster story, especially when you see prices going up on a daily basis,” he added.
In his analysis of the issue, he pointed out that the story could also lead to the search for a specific culprit. “It’s cut off from other assets…it’s CZ’s fault…it’s BlackRock’s fault…whatever,” he exemplified. In fact, he claimed that The problem is broader and corresponds to macroeconomic factors.
The Real Vision founder explained that he came to this conclusion after comparing the movement of Bitcoin with the movement of SaaS stocks, or software-as-a-service companies.Software as a Service), a technology sector sensitive to financial conditions.
Bitcoin, SaaS stocks, and the same macro factors
In terms of direction, SaaS and BTC are on the “same graph,” he said. For investors, this coincidence shows that there are common factors influencing both markets.
The reason for this, as he explained, is that US liquidity is decreasing “We have all been ignored,” he said, noting that “liquidity in the United States is limited” due to the functions of the central bank, the Federal Reserve.
He described the program as follows: reverse repo The FED’s (reverse repurchase contract) was effectively completed in 2024. This mechanism allows the Fed to absorb liquidity from the financial system by receiving cash from banks and funds in exchange for very short-term bonds.
Therefore, it shows that the rebuilding took place in July and August of TGA (Ministry of Finance General Account), “there was no monetary compensation” in the federal government’s general account, where tax revenues are deposited and public payments are made. “As a result, liquidity has dried up,” Pal noted.
This environment helps understand why indicators are showing weakness, he added. These include the ISM, an index that measures activity in the U.S. manufacturing and services sectors, which is typically affected when liquidity in the financial system becomes more constrained.
In his opinion, The US government shutdown due to the Trump administration’s refusal to take action has exacerbated this scenario.. He noted that the Treasury compensated the TGA without reducing it, and instead increased it, suggesting new liquidity losses had occurred. “This is the atmospheric stagnation we are currently facing, which is causing wild price fluctuations,” he said. However, on a positive note, he predicted that the current shutdown is expected to end this week.
Liquidity waiting for a rebound
In that context, Pal explained that he typically uses total global liquidity as a metric, as it has historically maintained a high long-term correlation with Bitcoin and the Nasdaq. But he believes overall U.S. liquidity is more decisive at this stage in the economic cycle.
According to the Real Vision founder, both Bitcoin and long-term investment technology stocks such as SaaS companies were punished for a “temporary pullback in liquidity.” He further explained that the rise in gold has absorbed much of the marginal liquidity available in the financial system.
“The riskiest assets were affected because there was not enough liquidity to support all these assets,” he summarized. Nevertheless, he was optimistic about the coming months.
For experts, the flexibility of eSLR, a regulatory standard that limits the leverage of big banks and, if relaxed, would allow for greater credit creation, would bring liquidity back. Added to this was the possibility of partial depletion of the TGA, fiscal stimulus and eventual interest rate cuts.
“In these full-cycle businesses, timing is often more important than price,” Pal said. “Prices may go down, but as time passes and the cycle progresses, everything will work itself out. That’s why I preach ‘patience!’ Things have to evolve. Looking at your accounts and losses only affects your mental health, not your wallet.”
BTC bull market will not collapse in the long run
From their perspective, the narrative is that Bitcoin is “broken” Further reacts to incomplete reading of macro context. than changes in the structure of assets. “There is no disconnect, it’s just a confluence of events that unexpectedly depleted liquidity,” he acknowledged.
In this regard, he said “another false narrative is circulating” that new Fed President Kevin Warsh will not cut interest rates, as he has defended in the past. This idea is “absolutely nonsense,” he commented. Otherwise, “the loan market will explode.”
He cited U.S. policy, which is expected to “remain bullish in 2026” under this vision. And he says that for risk-tolerant full-cycle investors, Ups and downs like now don’t matter.
Analysts are taking a different, more cautious stance, warning that the Bitcoin market is entering a crypto winter that could deepen further. As reported by CriptoNoticias, according to previous patterns, this is expected this year and a new bullish cycle could start later.
(Tag translation) Analysis and research
