Raul Pal believes the crypto cycle is not nearing its peak, but entering a longer, stronger expansion that could run until 2026, driven by an uptrend in global liquidity tied to government debt dynamics. In a special September 25th “All Code” masterclass with heads of Global Macro Investors (GMI) Macro Research Julien Bitter, the co-founder of Real Vision laid out a closely interlocked framework that connects business cycles with demographics, debt, liquidity and asset returns.
All Code: Liquidity is Crypto’s Master Switch
“The biggest macro variable in history is that global governments and central banks are increasing liquidity to manage their debt at 8% per year,” he warned investors to separate the ongoing decline from measured inflation and think about it at hurdle rates. “There is an 11% hurdle rate for the investment you have. If your investments aren’t reaching 11%, you’ll become poor.”
Pal and Bittel’s “all codes” start with trending GDP as the sum of population growth, productivity and debt growth. Public debt filled the gap as the working-age population declined and productivity became more sluggish.
“Demographics are destiny,” Pal points to a decline in labor participation rate, reflecting GMI’s work reflecting a merciless increase in government debt as its share of GDP. The bridge between the two they claim is a liquidity toolkit for the balance sheet, general accounts (TGAs) of the Ministry of Finance, reverse repos, and banking system channels. “If the trend grows at ~2% and the interest rate is 4%, then that gap needs to be monetized,” Pal said. “It’s an old story like a hill.”
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Vitel then mapped what he called “Dominoes.” GMI’s financial position index (economic blend of goods, dollars and fees) lists total liquidity for approximately three months. Total liquidity leads the ISM manufacturing index by approximately six months. And ISM sets revenue, circulation and crypto beta tones. “Our job is to live in the future,” Vitel said. “Finance terms are leading ISM nine months ahead. Liquidity is six times the lead. That sequence is what the risk market actually trades.”
In that sequence, Crypto is not an outlier, but a high beta macro asset. “Bitcoin is an ISM,” Vitel said, saying that it will also map to BTC and ETH, which also dominates small caps, cycles, crude oil and the same diffusion index dynamics that control emerging markets.
As the cycle accelerates from the sub-50 ISM towards the 50s, the risk appetite moves down the curve. It moves first from BTC to ETH, then to the larger alternative L1S, then to a smaller cap that coincides with a decrease in BTC dominance. PAL told investors who expect “instant altseason” that “it always goes into the next safe asset first… Do you only get rest if the ISM is really high and the dominance is falling sharply?”
They argued that some of the recent “sideway chops” reflect a sharp restructuring of TGA. This is an exogenous fluid drainage discharge that disproportionately affects the far end of the risk curve. Bittel highlighted that a $500 billion change rate since mid-July effectively removed the fuel that otherwise supported crypto prices.
He also flagged demark timing signals, referring to reversal in the contribution of TGA to net fluidity. “This should turn the back and work until the end of the year, driving liquidity composites high,” he said, adding that the balance sheet of the best People’s Bank of Japan’s ever-growing bank has partially offset US drugs.
Against this background, the pair argue that the next 12 months are important. “We’ll have $9 trillion in debt over the next 12 months,” Pal said. “This is 12 months when the biggest money printing comes.” The policy rate for their basic cases moves to a cycle that is still subdo but improved. Central banks focus on slowing employment and slowing inflation in core services, but the width of early cycle inflation is still included. Bittel highlighted the internal sequence of inflation itself. First, then the goods, then the shelter mechanically lags, reducing central bank coverage even as growth accelerates.
Pal’s claims to have impact on portfolio construction is radical. “Diversification is dead. The best thing is super enrichment,” he said. In GMI’s long distance tables, most traditional assets combine declining obstacles with inflation hurdles to reduce performance, while the Nasdaq has earned excessive returns against liquidity and Bitcoind Wharf. “What is the point of owning other assets?” asked Pal rhetorically. “This is a super-large black hole of assets. So we personally are all-in with cryptography. This is the biggest macro trade of all time.”
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Bittel overlays Bitcoin’s log regression channel (what PAL calls the “network adoption rail”) in ISM to explain how time and cycle amplitudes interact. Adoption drifts the target higher over time, so longer cycles refer to mechanically higher potential outcomes. He presented an example level tied to a virtual ISM print to illustrate the mechanism when ISM rose to a low 50 seconds, and when cycles were extended to the low 60s. The numbers were presented not as predictions but as a map of how cycle intensity is converted into a range-bound fair value band.
Macro fluidity extends the bull run of crypto
Seriously, Pal and Bittel argued that the current cycle differed between 2020 and 2021 when both liquidity and ISM peaked in March 2021 and cut off the run. Today they set the 2017 style Q4 impulse with the liquidity re-accelerated into the debt compensation window, with ISM still below 50, setting the 2017 style Q4 impulse with seasonal tailwinds. And unlike 2017, the throttle cycle itself is longer, so the probability of the strength flowing out to 2026 is 2026. “It’s very unlikely that he’s the top of the year,” Pal said. “ISM is just not there, and there is no global fluidity either.”
This framework finds cryptography within the broader secular S-Curve. PAL explains why traditional valuation optics are being stretched and why they have long-term ownership, in contrast to the revenue and wages of Fiat Planet and GDP-Anchored, which raises asset prices.
He insisted that Crypto users’ growth would be placed around twice as high as the internet at a comparable stage, allowing the token to allow investors to own the next web infrastructure layer. With gross addressable value, he applied the same log trend framing across the digital asset market, sketching the path from around $4 trillion by the early 2030s to a potential $100 trillion by the early 2030s.
PAL was closed with operational advice consistent with longer liquidity-driven expansions: maintain exposure to a proven large crypto network, avoid leverage that forces yield during routine 20-30% drawdown, and avoid matching Time Horiton to the macro clock rather than the headline. “We’re four percent there,” he said. “Your job is not to ruin this.”
At the time of pressing, the total crypto market capitalization was $3.67 trillion.
Featured images created with dall.e, charts on tradingview.com