The Super Massive Black Hole that Eats All Other Assets

Having spent the last three plus decades of my life in the world of macro, I continue to insist that EVERYTHING remains a sideshow vs crypto.

Regardless of how you feel about the asset class, it is undeniable that the digital asset space is experiencing the fastest adoption of any technology ever. So, whether you love it or hate it, don’t forget that our duty as investors is to seek out opportunity!

The total crypto market cap should hit at least $10tn during the next cycle and it could end up going much, much further than that…

Now, since last year, it has been my view that THE perfect setup came to pass when the cyclical trend hit the secular trend. Just have a look at ETH and BTC. ETH came back with a vengeance from its June low and is now up 110% since then. Same thing with BTC; after hitting the low in October, it’s up 88%.

At this juncture, it becomes important to shift our focus to the cyclical trend as it will drive the next leg of the secular bull market.

And, in order to understand the cyclical trend, we need to understand liquidity. Take a look at the chart below. The liquidity cycle bottomed in October…

Based on current economic weakness (ISM < 50), liquidity will continue to increase well into 2024 and beyond…

What does this mean for crypto? Let’s have a look… here’s global liquidity versus ETH. Pretty incredible, right? Liquidity up, crypto up…

ETH continues to trade very similarly to BTC back in 2014-2016. This chart generally mirrors The Everything Code which suggests ETH approaches $3600 by October…

And Solana continues to look a hell of a lot like ETH during 2019; the next leg higher is imminent…

Although ETH is already up 58% YTD, it still looks like it’s about to rip MUCH higher. Prepare for liftoff!

Have a look at ETH vs BTC… still in consolidation mode but the BIG break is coming soon…

Solana looks like it could double from here after breaking out from a big head-and-shoulders bottom…

Meanwhile the SOL/ETH chart appears similar to the one above. It could triple (or more) the performance of ETH…

And the long-term chart of the SOL/ETH cross is WILDLY bullish!

My feeling is that we are very likely close to a face-ripping rally in crypto before things calm down for a bit. Remember that May and June are historically the strongest months in the first year of a bull market. However, next year and 2025 will be the big ones.

It’s unclear whether we have a few more weeks of consolidation before that bigger rally or we go straight from here. What is clear is that it is coming…

To the moon and beyond.

As ever, much fuller and more in-depth analysis can be found in Global Macro Investor and Real Vision Pro Macro. Global Macro Investor is our full institutional research service and Real Vision Pro Macro is the sophisticated retail investor service, which is co-authored with leading research firm MI2 Partners.

Stay tuned for next week’s update!

Raoul Pal – CEO, Founder - Global Macro Investor

Julien Bittel – Head of Macro Research - Global Macro Investor