Raoul Pal: Crypto will rise as QT ends and global stimulus returns

Pal says $10 trillion in U.S. debt renewal will trigger new government bond spending, weaken the dollar and strengthen risk markets.

A significant tightening of US dollar liquidity is putting pressure on crypto markets, with Bitcoin (BTC) temporarily falling to a five-month low near $99,000.

Despite the current downturn, prominent macro analyst Raoul Pal tells investors that a massive wave of global fiscal and monetary stimulus is in store, paving the way for a strong crypto recovery.

Pal and Hayes Point to Liquidity as Crypto’s Next Big Catalyst

Pal’s optimism stands out in a market still reeling from major losses. Bitcoin, which was trading near $102,500 at the time of writing, is down almost 10% over the past week and around 18% over the past month. Meanwhile, Ethereum (ETH) is down nearly 30% over the same period, according to data from CoinGecko.

However, Pal insists this turbulence is temporary, describing it as a “window of pain” before a coming flood of liquidity. His bullish thesis is centered about the impending end of quantitative tightening (QT) and the expected return on fiscal spending once the US shutdown ends. The analyst pointed out that roughly $10 trillion in government debt needs to be rolled over over the next 12 months, calling it “the only game in town.” And when government bond spending picks up again, estimated at between $250 billion and $350 billion, he expects liquidity to increase, the dollar to weaken and risk markets to strengthen.

Pal also predicted that the upcoming CLARITY Act, which aims to provide clearer crypto regulations, could pave the way for wider institutional adoption. Combined with potential rate cuts, changes to banks’ balance sheet rules and global fiscal stimulus from China and Japan, he sees a synchronized macro setup heading into the 2026 U.S. elections, which he says is aimed at “boosting the economy.”

The market watcher is not alone with his cheerful view. BitMEX co-founder Arthur Hayes also echoed similar sentiments earlier today: to link Bitcoin’s decline to an 8% decline in US dollar liquidity since July. He said that once state balance sheets fall after the shutdown, dollar liquidity will recover, causing BTC to rise. Hayes also wrote in the latest edition of his Substack that investors can “expect a choppy market until stealth QE kicks in.”

Market still vulnerable, but macro prospects are becoming brighter

The liquidity drain has weighed heavily on digital assets, with the market losing nearly $400 billion this week, pushing total capitalization down to around $3.2 trillion at one point. But despite the volatility, analysts emphasize that the sell-off appears to be more technical than fundamental, driven by debt and forced liquidations rather than deteriorating demand.

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Bitfinex Alpha noted that long-term Bitcoin holders are still losing about 104,000 BTC per month, suggesting profit-taking rather than panic. Meanwhile, institutional traders have remained cautious as they wait for clearer signals following the Federal Reserve’s October rate cut.