TLDR:
- Raoul Pal sees crypto and tech stocks within one standard deviation, not in bubble territory.
- He asserts price / earnings shifts reflect fiat debasement rather than irrational bubbles.
- He notes BTC usually breaks two standard deviations, but still hovers near trend now.
- Global liquidity, driven by debt and central banks, is the main macro force today.
Raoul Pal is pushing back hard against warnings of a tech or crypto bubble. He argues we are still inside normal trend bounds. He claims P/E narratives miss how debasement inflates prices.
Moreover, he points to BTC also hugging trend lines, not spiking to extremes. He links all this to global liquidity and debt cycles. His view frames current prices not as irrational, but as mechanically driven.
Crypto Price, P/E and Trend Limits
Pal says you cannot label markets a bubble when both tech and crypto remain under one standard deviation from their long-term trend. He contrasts that with the late 1990s, when valuations exploded far beyond trend. He argues that narrative around “bubble valuations” ignores how fiat weakening pushes P higher faster than E.
He asserts that if currency debases at 11 percent while real economy grows at 2 percent, P/E ratios will double in around eight years. He sees this “denominator effect” as a key driver of price gains.
Besides, he also highlights Bitcoin’s position relative to trend. He states that BTC is currently less than one standard deviation from its long-term channel. He expects that historically it “usually hits two standard deviations,” which implies upside room still remains.
Thus, in Pal’s view, current crypto price levels are not the result of speculative excess. They are mechanically tied to how money is devaluing, and how earnings lag the inflation of price. He rejects the idea that we have entered a self-reinforcing mania.
He further argues that tech indices (NDX) display only a “slight premium” over trend, which he deems normal for this phase. He notes NDX remains tightly correlated (96 percent) with global liquidity movements, while BTC holds close to 90 percent correlation.
Global Liquidity, Debt Cycles and Market Force
Pal shifts focus beyond the U.S. He calls global liquidity the dominant macro vector in markets. He puts debt maturity at the heart of the cycle: debt burdens lead to debasement, which forces liquidity creation, which in turn drives asset prices.
He points out that U.S. debt maturities have been extended, so massive rollovers haven’t hit yet. That delays liquidity stress in 2025, pushing more of the shock into later periods. He believes the lackluster economic data (e.g. weak ISM) reflects this delayed infusion.
But he also reminds us that in 2017, even when U.S. liquidity was flat, China and the UK drove global liquidity upward, keeping markets buoyant. His claim is that this remains the central channel. He contends that markets are less about U.S. rates and more about how global credit systems evolve together.
He admits the phrase “this time is different” is dangerous. But he argues the cycle mechanics are consistent: maturity, debt, liquidity, and price. He says he always carries exposure to upside, so he can capitalize when his view proves right or adjust when wrong.
In sum, Pal rejects the “bubble now” narrative. He frames crypto price and markets at large as engines of monetary mechanics, driven by debasement and liquidity, not by pure speculation.
The post Raoul Pal: Tech and Bitcoin Aren’t in a Bubble, Global Liquidity Still Rules appeared first on Blockonomi.
Source: https://blockonomi.com/raoul-pal-tech-and-bitcoin-arent-in-a-bubble-global-liquidity-still-rules/