Global macro investor and former Goldman Sachs executive Raoul Pal raised the possibility that the 2025 bull rally that crypto markets are eagerly awaiting may not materialize.
In his statements, Pal suggested that Bitcoin’s traditional 4-year cycle has now turned into a 5-year cycle due to macroeconomic factors, and stated that the next peak is expected in the second quarter (Q2) of 2026.
According to Pal, the main factor driving Bitcoin price movements is not the “halving” (half-time), contrary to popular belief, but the global business cycle. Raoul Pal attributes the main reason for the extension of the cycle to the ISM (Institute for Supply Management) Purchasing Managers Index, an indicator of the Business Cycle of the US economy.
According to Pal’s findings:
- Debt Maturity Extension: The extension of the average maturity of US debt from 4 to 5 years between 2021 and 2022 also postponed the business cycle by one year.
- ISM and the Business Cycle: According to analysts, cryptocurrency market price movements follow the ISM index. A reading below 50 indicates contraction, while a reading above indicates economic expansion. Pal noted that since its peak in 2021, the ISM has remained below 50, one of the longest contractions in decades.
Based on this 5-year cycle driven by debt maturity extension, Pal predicts that the peak of the ISM, and therefore Bitcoin, will shift to the second quarter of 2026.
“Currently, the ISM is above 50 and the economy is not booming. The global economy is not yet in an expansion and Bitcoin is following suit,” Pal said.
*This is not investment advice.