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Real Vision co-founder Raoul Pal says crypto’s next bull cycle is already taking shape, powered by the same force that helped lift the market from its 2022 lows: global liquidity.
In a clip shared by industry analyst Milk Road, Pal argued that “the Fed has handed the liquidity baton to the banks,” meaning the Federal Reserve may no longer be the main force adding money to the system. Instead, banks could play a bigger role by lending more money, buying assets, and helping credit move through the economy.
How is this relevant to crypto? Well, more money moving through the financial system often means more money to spend on riskier assets. Bitcoin, Ethereum, and other cryptocurrencies tend to perform better when investors have more cash to spend, and credit is easier to acquire.
Pal’s larger point is that crypto may no longer follow a simple four-year cycle tied largely to Bitcoin halvings. Rather, it would be shaped by traditional economic forces like government debt, bank reserves, lending, and pressure on policymakers to keep the economy moving. These findings echo Milk Road’s January 27th episode with Pal.
However, Bitcoin halvings are still relevant. They still reduce the amount of new BTC entering circulation. Pal’s view is just that halvings matter less than the bigger money cycle surrounding them.
The timing of Pal’s comments is important, as the Federal Reserve began shrinking its balance sheet in June 2022, ending that process on December 1st, 2025. Days later, on December 10th, the Fed announced it would begin reserve management purchases as well.
The New York Fed has said these purchases are meant to keep reserves in an “ample” range, meaning banks should have enough cash on hand to keep markets running smoothly. The first purchase schedule was about $40 billion in Treasury bills, with purchases starting on December 12, 2025.
This is not the same as the pandemic’s stimulus injections, but it does mark a change from the tighter money period that hurt crypto after 2021. Once again, summarizing Pal’s point: when money is leaving the system, investors tend to avoid risk. When money starts moving back, risk assets, like Bitcoin, can recover.
Still, Pal’s view isn’t guaranteed. The macro setup may be improving, but Bitcoin has not fully confirmed the next bull cycle.
Reuters reported on June 5th that Bitcoin was heading for its worst start to a year in more than a decade. The report noted that Bitcoin had fallen about 33% in 2026, while investors moved money toward AI stocks and major upcoming IPOs instead.
Bitcoin ETFs have also seen large outflows this year, with Reuters also reporting a loss of more than $3.1 billion in 2026. Top semiconductor ETFs had pulled in more than $21 billion. So even if overall liquidity is improving, crypto demand is still weak. Investors might need to see Bitcoin regain strength before they believe the next cycle is real.
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