Raoul Pal, CEO of Real Vision believes the crypto market has yet to reach its peak and that a new rally is possible in the first quarter 2022. Institutional big money will be the most likely driver before the markets turn frothy.
Global Macro Investor founder and CEO Raoul Pal has said that people getting extremely bearish as the crypto markets struggle should note that the game hasn’t changed.
In his opinion, much of the sell-off pressure is down to investors taking new positions and rebalancing, given the space has seen “a good year of owning risk.”
Bitcoin price reached highs of $69,000 in early November as did many other top cryptocurrencies following a fresh momentum on the back of regulatory tailwinds presented by the SEC’s approval of the first futures-based exchange-traded funds in the US.
The market has seen a decline, with Bitcoin falling below $50,000 to illustrate the general downturn over the past month. While some analysts believe the market is nearing a bear market, many others, including the CEO of Real Vision, think otherwise.
According to Pal, most investors will realise that cryptocurrencies have generally “gone nowhere since May,” with the exception likely to be with those lucky to have nailed a pump.
He notes that crypto’s bullish run from July lows currently sees most crypto assets trading well below their year-to-date peaks.
“But we haven’t seen a blow-off top with record participation. We have seen speculation of some size in NFT’s but that is mainly people who already have ETH and have profits to burn,” Pal said in a Twitter thread sharedTuesday
According to the investment strategist, there is meaningful institutional adoption in the industry. This should lead to a surge in new use cases and more investments in Q1. This will push prices higher. If this happens, the analyst believes there’s likely to be an explosion of new money into the market and potentially see crypto become frothy.
Pal advises that it might be time to “sit tight, add on dips and if we see another sharp rise in the entire space, reduce your more speculative holdings and rotate to higher quality.”
He believes the market is ready for a new investment phase, which should see institutional adoption and retail focus shifting. The scenario has slowly built towards this end for much of the year, but the “big herd” will really make an entry in 2022.