Raoul Pal – CEO of Global Macro Investor – is forecasting a “nasty recession” and a “big liquidation” over the next few weeks as the Federal Reserve tightens monetary policy further. He believes that the current panic in the crypto markets is similar to that seen during the June 2021 bear market and March 2020 flash crash.
The Effect of the Fed
In a Twitter thread on Thursday, Pal argued that bruises are in store for global markets across the board — not just crypto. “Layoffs are coming, as well as falling house prices,” he said, claiming that demand is collapsing due to the “biggest monetary tightening in history.”
Last week, the Federal Reserve announced a 0.5% interest rate hike — the largest monthly hike since May 2000. Both the crypto and stock markets collapsed in the wake, with Chairman Jerome Powell pledging several related hikes in the coming months .
Pal claims that the stock markets have already priced this in and that both the credit and bond markets are just beginning to do so. Oil, he believes, is bound to fall, giving the Federal Reserve an “excuse” to stop tightening by July.
However, he believes that the near future will be quite bleak.
“The next 4 weeks will be very worrying as every position will be destroyed and shot,” he wrote. “There will be no safe place to hide (except for bonds – but those fall short for most people).”
Crypto in “Full Panic Mode”
Crypto is no exception as the price of Bitcoin is now under $30,000. It has recently fallen to a low not seen on BitStamp since December 2020, while both Terra and TerraUSD have completely fallen apart.
As Pal puts it, the crypto market is in “full panic mode” with the “monkeys” (likely referring to Bored Ape NFT-Refer to holders) are busy “throwing poo at each other”. The CEO himself uses a bored monkey as his Twitter profile picture.
Still, Pal calls crypto a “long-term investment” rather than a trade and sees the upcoming recession as a “great opportunity.”
The investor is known for his extreme interest in Ethereum to become the so-called “Internet of Values”. He concluded that he will take this opportunity to learn more about the cryptocurrency to buy, which just recently fell below $2000.
The founder of CardanoCharles Hoskinson, believes the crypto market has entered a period of “bloody panic in the streets” and may take months to recover.
Still, MicroStrategy CEO Michael Saylor remains bullish on Bitcoin as ever, calling it “the best inflation hedge” on Thursday. The recent downturn has submerged his company’s entire Bitcoin position.
Source: Crypto News Deutsch