Ex-Goldman Sachs CEO Raoul Pal says a massive bubble cycle could be in store for the crypto markets.
In a new interview with crypto influencer Scott Melker, the macro guru and CEO of Real Vision says that while he believes the current market cycle is probably normal, there is also a 20% chance it will be a “giant bubble cycle.”
“Here’s my probability set: 60% chance it’s a normal cycle, kind of like the last cycle, but maybe a little more like the last cycle – like 2017, which got a little crazy. There’s a 20% chance that it might all get brought forward, because we have all the retail demand, and it’s actually a shorter cycle than expected.
If you think the last cycle actually lagged a bit compared to people’s expectations, maybe this is a regression in terms of time. The other outcome I have, the other 20% chance, is that this is a giant bubble cycle, somewhere between the 2012-2013 version and the 2015 version, because everyone can join in now and total madness will ensue.
And I don’t know which of the three it will be, but they all have a good chance.”
Pal says investor sentiment points to a belief in a shorter cycle. However, he says they may be right about rising prices, but they’re probably wrong about the length of the cycle.
“Everyone was a bit shocked that we didn’t have a final stage last time, so they now have that imprint… so now they’re all expecting it to be a smaller cycle. And I always look for where the audience can be wrong but still be right, i.e [that] it’s going up, but it’s going up even more [than they think].”
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