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Tech Vs Crypto: Investment Guru Predicts the Next Big Move
- Raoul Pal predicts digital assets will outperform tech stocks due to increasing dollar liquidity, which historically aligns closely with the Nasdaq index and boosts risk assets.
- He notes the subdued performance of cyclical stocks and commodities due to the current economic outlook, as indicated by the ISM Index and its prediction of low GDP growth.
- Pal is bullish on altcoins, citing their potential for significant returns, but advises caution in trading altcoins outside the top 10, suggesting that holding Bitcoin, Ethereum, and possibly Solana can yield substantial gains.
Dollar Liquidity and the Nasdaq
Raoul Pal, former Goldman Sachs executive and now CEO of Real Vision, has voiced his bullish stance on crypto before – now he reveals why crypto is primed to outperform tech stocks.
He predicts that digital assets are poised to massively outperform tech stocks due to a key catalyst – the increase in dollar liquidity. He explains that dollar liquidity, which drives risk assets like stocks and cryptos, has been moving in close alignment with the Nasdaq index for over a decade, maintaining a strong uptrend. Â
According to Pal, the ISM (Institute for Supply Management) Index, a predictor of economic trends, is currently showing minimal growth, which suggests that the GDP (Gross Domestic Product) will likely be low in the fourth quarter of this year and the first quarter of next year. This economic outlook affects cyclical stocks, the Russell 2000 Index (RTY), and commodities markets, leading to their current subdued performance.
Altcoins to Outperform Rest
Pal emphasises that cryptos tend to outperform tech stocks significantly as the liquidity cycle becomes positive, indicating a more rapid growth for crypto assets in such economic conditions.
Furthermore, he expresses a bullish stance on altcoins, citing the example of Solana (SOL), an Ethereum (ETH) competitor. Solana recently showed a strong uptrend, breaking out of a classic bullish pattern and achieving over 475% growth year-to-date, highlighting the potential for significant returns in the altcoin space.
Pal believes altcoins start to outperform Bitcoin (BTC) for the rest of the cycle, but trading altcoins outside the top 10 is challenging and risky, with substantial gains achievable by holding Bitcoin, Ethereum, and possibly Solana or another established project.
And within Crypto, Alts begin to outperform BTC and do so for the remainder of the cycle… but trading Alts outside the top 10 is HARD (and very risky). You can accomplish most of the gains by just holding BTC, ETH and maybe SOL (or another proven project with adoption).
Raoul Pal 
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
