Ex-manager of Goldman Sachs: the cryptocurrency market is l | TokenHolder
Ex-manager of Goldman Sachs: the cryptocurrency market is likely to have already found the "bottom"
Raul Pal, who previously worked as a top executive at the U.S. investment bank Goldman Sachs, said that the macroeconomic conditions in the world, which have kept the cryptocurrency market in a bearish state for most months of this year, have begun to change.
Based on data from the Institute for Supply Management and purchasing managers' indices (PMIs), he concluded that the U.S. and the European Union are entering a period of economic decline (recession), and it is happening quite quickly.
According to him, this will affect the outlook for global economic growth, which is "evaporating.
He noted that prices for most commodity futures are now 30-50% lower than their historic highs, oil was also affected, but traders were confident that the energy commodity would go to $200/barrel.
However, because of the recession, Pal predicts a collapse in oil prices to $60/barrel.
Pal drew attention to the crisis on the US consumer market: due to recession at the moment, the demand of individuals is decreasing, which in its turn is responsible for 85% of the US GDP. The decline in demand occurs against the background of a large amount of inventory, which retailers in the U.S. have also accumulated during the decline in demand since the beginning of the COVID-19 pandemic.
However, high inflation in the U.S. does not allow them to realize these inventories now, which causes the need for retailers to save money, including on investment programs, but this in turn exacerbates the recessionary situation.
Pal believes that the financial markets are now accumulating a lot of spare cash from U.S. and European investors who do not want to spend it on current consumption, but intend to invest it in financial instruments.
According to his estimates, there is already a 70% probability that the cryptocurrency market has passed its lowest point and now will start to grow steadily. Here he sees interest in bitcoin as well, following the upward trend that gold has shown since mid-July.
Pal also points to increased investor interest in riskier crypto-assets than bitcoin - altcoins. Speaking about Ethereum, the former top executive at Goldman Sachs said that the Merge update could make this largest-capitalization altcoin even more attractive to institutional investors.
