Raoul Pal, a former Goldman Sachs executive, predicts that the crypto market could experience significant gains as 2024 draws to a close.
In a recent conversation with crypto trader Scott Melker, Pal pointed to historical trends suggesting that Bitcoin (BTC) and other cryptocurrencies might see substantial price increases in the final days of December.
This period is often associated with a “Santa Claus rally” in traditional markets, a phenomenon where equities tend to rise during the last few days of the year and the first two trading days of the new year. Pal noted that it’s common for markets to rally strongly into the end of the year, but emphasized that the most substantial movements could occur in the first quarter of 2025, potentially coinciding with changes in U.S. Federal Reserve policy.
He also predicted that a major rally is still ahead in this cycle, which he anticipates might take off around March 2025, when the Fed could potentially lower interest rates. Pal humorously referred to this phase as the “banana singularity,” describing it as a time when markets could go into overdrive.
Despite his optimism, Pal cautioned that a temporary pullback might occur as the year ends due to tightening liquidity. He pointed out that Bitcoin’s price often correlates with changes in the global money supply, and a reduction in liquidity tends to push the price down. Pal referenced the period during the Trump administration when the dollar strengthened and interest rates rose, only to reverse course in the new year, predicting a similar pattern of market correction as liquidity tightens towards year-end.
