Real Vision
Central banks and governments are increasing liquidity to manage debt at roughly 8% annually. Combined with inflation, this sets an 11% hurdle rate for investments. Assets that fail to meet this threshold lose value in real terms. Bonds and cash fall short, while crypto provides a way to preserve and grow purchasing power over time.
According to Pal, liquidity, not earnings or geopolitics, remains the dominant factor behind asset prices.
He said that liquidity explains about 96% of tech stock variability and roughly 90% of Bitcoin’s. This framework shows why crypto often rises when conventional indicators appear weak, making macro conditions more relevant than short-term noise.
Pal said Bitcoin has delivered about 130% annual growth since 2012, even with major drawdowns of 64%, 73%, and 56%. Ethereum has compounded at roughly 133% per year and has consistently outperformed Bitcoin in past cycles.
Early-stage networks like Solana and Sui have delivered steeper gains during adoption phases. Pal argues that concentrated exposure to crypto may be more effective than broad diversification in this environment.
Pal expects Ethereum to outperform Bitcoin in the current cycle due to its adoption trajectory. However, Bitcoin remains the core of crypto portfolios, providing stability and steady compounding returns.
Echoing Pal’s view, Ethereum looks ready to take momentum from Bitcoin. If ETH breaks its short-term highs, it could move toward setting a new all-time high. It seems very likely that we’ll be getting into a stage that $ETH is going to take over the momentum from $BTC,” Poppe said.
