Raoul Pal, a prominent macro investor, has noted that Bitcoin’s recent lag behind gold is not an unusual phenomenon and might actually be laying the groundwork for a significant surge in the future.
Discussing the ongoing comparison between Bitcoin and gold, Pal pointed out that gold usually leads market movements first, with Bitcoin following later in the economic cycle. He emphasized that this dynamic isn’t really about gold itself but rather reflects where the global economy stands within its broader business cycle.
It’s More About Liquidity Than Gold
According to Pal, gold acts as a mirror to financial conditions. When governments grapple with increasing debt burdens and rising interest expenses, they often respond by injecting liquidity into financial systems. This influx of liquidity eventually permeates asset markets.
“Financial conditions set the stage for liquidity flows, which then drive asset prices,” Pal explained. Historically, gold tends to react first during these cycles while Bitcoin follows after some delay.
He further mentioned that when comparing price trends of Bitcoin and gold with approximately a six-month offset, their patterns align closely. The current divergence—what he calls “alligator jaws”—is primarily due to crypto-specific setbacks rather than any fundamental breakdown in this cyclical relationship.
The Crypto Market Is Currently Underrepresented
Pal believes many investors are presently underexposed to cryptocurrencies because there is a widespread perception that the bull run has ended. Should prices begin climbing again from here on out, he anticipates rapid investor interest chasing those gains.
“Once crypto starts gaining momentum again,” he said, “people will realize they have been underinvested.”
Why 2026 Might Mark A Turning Point For Bitcoin
Pal also shared his outlook on why 2026 could become an important year for Bitcoin’s trajectory. His analytical model—the “Everything Code”—bases roughly 90% of Bitcoin’s price action on shifts in global liquidity levels.
He noted that last year failed to deliver the anticipated boost in liquidity as governments extended debt maturities instead of injecting fresh capital into markets—effectively stretching typical cycles from four years toward five years.
A series of unforeseen events—including prolonged government shutdowns and tightening liquidity—hit risk assets like cryptocurrencies particularly hard. October was especially brutal when massive liquidations across exchanges inflicted widespread damage on both Bitcoin and broader crypto markets.
The Reason Behind Bitcoin’s Sideways Movement
The crypto sector is still recovering from these shocks according to Pal—which explains why while stocks and gold have surged ahead recently, Bitcoin has largely moved sideways without significant upward momentum.
“Crypto occupies an extreme position along risk spectrums,” said Pal. “When liquidity dries up it suffers first—but conversely it tends to rebound fastest once liquidity returns.”
In summary: Raoul Pal views bitcoin’s lag relative to gold as part of normal macroeconomic cycles tied closely with global liquidity trends. If those conditions improve as expected over time then bitcoin may well catch up—with 2026 poised as a pivotal year for its next major advance.