- Analysts claim ETH will eclipse BTC in the crypto summer.
- The US liquidity injection could boost the market in the second half of 2024.
Ethereum [ETH] could surpass Bitcoin [BTC] as we get closer to crypto summer. The bold projection was made by Raoul Pal, founder of Real Vision and a leading commentator on the crypto market.
In an X-post, Pal underlined that crypto summer is an altcoin season that shifts attention from Bitcoin to others. Part of his message read,
“Crypto summer is usually the start of Alts season, which goes completely ‘bubble-tastic’ in the fall. This is when ETH settles in and starts to outperform BTC. This is when SOL accelerates its outperformance against BTC and ETH.”
Adding a timeline to his projection and how “crazy” things can get, Pal emphasized that:
“Once the markets fully refresh, that’s usually when The Banana Zone kicks in, building into full mania by the end of the year… and well into 2025”
Source: X/Rauol Pal
The American liquidity factor
Pal’s projection is purely based on historical data. However, past performance does not necessarily determine future results. What could be the main catalyst for Pal’s wild projection?
A softening macro front is one of the likely factors. Singapore-based crypto trading firm QCP highlighted how US liquidity injections could boost markets.
In a weekend update via Telegram, the company acknowledged that US inflation is still high. However, it reiterated that the US Treasury could inject more liquidity in the second half of the year. Part of the explanation read,
“At this point, however, monetary policy could be much less important than fiscal policy, which will be the main driver of liquidity and asset performance.”
The company added that,
“The upcoming Quarterly Refunding Announcement (QRA) on May 1 could also lead to higher issuance of U.S. short-term notes. This will deplete the RRP, which currently stands at $400 billion, and also increase liquidity.”
Last week, BitMEX founder Arthur Hayes made one similar projection. He emphasized that additional liquidity will be injected into the economy during the US elections.
More liquidity means an additional money supply within global or local markets, especially when central banks cut interest rates. This is a perfect condition for a recovery of risky assets.
Whether Ethereum outperforms Bitcoin remains to be seen. However, much of the hyped “crypto summer” could be fueled primarily by macro factors rather than historical cycles.