178 - Is Crypto's Bear Market Almost Over? with Raoul Pal
Bankless
There’s Leaders and Laggers. ETH led. NFTs lag. Need new capital for NFTs. Need pos+ price for ETF.
Throughout 2021, there were numerous top signals in the market but exposure to the market was still beneficial. However, the top signals played out in November 2021. In the last year, there have been bottom signals starting with Terra Luna, followed by three hours capital and FTX. The signals started to diverge with some bullish indicators, such as ETH becoming deflationary. Despite pessimism and fear brought by Gary Gensler, there are growing signals of confidence that we are approaching the end of the pessimistic period. NFTs are currently lagging due to a lack of capital flowing through the space. The ETF, while not causing a stampede initially, becomes powerful as prices rise because many investors are momentum investors who have already done the work and just need price validation. As new capital flows into the space, starting with Bitcoin as the benchmark asset, it spreads to other parts of the space and causes an outside reaction. The crypto space needs new capital as it has been recycling capital for a while. Economic situations worldwide have limited new investments, but as people start making money, it will flow through the space. The ETH Bitcoin outperformance will likely resume as well, correlated to the business cycle and liquidity.
