Goldman Sachs Remains Bullish on Crypto

• Raoul Pal predicts that the crypto will experience a surge in capital as liquidity returns to the market.
• This growth will result in new innovations that will attract more users.

According to a recent AMA session, former Goldman Sachs executive Raoul Pal predicts that the crypto industry will experience a surge in capital. As liquidity returns to the market, leading to growth from 300 million to what he believes will be one billion users worldwide.

Raoul Pal states:

“There will be applications you haven’t dreamt of or things you thought weren’t coming. That will come at scale, whether it’s digital identity, whether its massive cases of Web3, whether it’s DeFi (decentralized finance), or whether it’s something entirely new. Whether it’s ticketing via NFTs (non-fungible tokens), who the hell knows?”

Pal, who is a macro expert, believes that this growth will result in new innovations that will attract more users. Including digital identity, massive cases of Web3, DeFi, or even ticketing via NFTs. He also suggests that the Federal Reserve’s attempt to control inflation may result in a recession. Causing a reversal of course and money printing to boost the market. 

“This is exactly what happened in 2019 after the Fed pivot in 2018. The Fed is going to pause soon or has paused. I think they have paused or certainly should pause. And we’ll see this continued acceleration until liquidity slows down at some point, and then we’ll have pauses in the market.”

Pal’s predictions follow that digital assets will continue to be adopted by big companies and institutional investors.

“We may even have pullbacks if liquidity goes back, which I don’t really see. And then we’ll see acceleration as we hit the recession and the unemployment side of the equation, which comes later when the real money printing and rate cutting really starts.”

In May 2021, Goldman Sachs launched a crypto trading desk to assist its clients in trading bitcoin futures. 

Goldman Sachs Remains Bullish on Crypto

In a February 2023 interview with CNBC, another Goldman Sachs staffer, digital assets chief Mathew McDermott, said that crypto markets are undergoing a “flight to quality.” 

McDermott said:

“The excitement from our side is … seeing how this technology can impact many different parts of the financial system and have a real commercial impact,”

“We’re at such an early stage in terms of its adoption, but as you look across the marketplace and you see the breadth of financial institutions building out their digital asset teams, their digital asset strategies, be that the sell side or the buy side, it’s just super exciting and I think there’s a real recognition there.”