Pal says $10 trillion in U.S. debt rollover will trigger fresh Treasury spending, weaken the dollar, and strengthen risk markets.
A significant tightening of U.S. dollar liquidity is pressuring crypto markets, with Bitcoin (BTC) temporarily falling to a five-month low near $99,000.
Despite the current downturn, prominent macro analyst Raoul Pal is telling investors that a massive wave of global fiscal and monetary stimulus is on the horizon, setting the stage for a powerful crypto recovery.
Pal and Hayes Point to Liquidity as Crypto’s Next Big Catalyst
Pal’s optimism stands out in a market still reeling from steep losses. Bitcoin, trading near $102,500 at the time of this writing, has dropped nearly 10% in the past week and around 18% over the last month. Meanwhile, Ethereum (ETH) has fallen nearly 30% in the same period, per data from CoinGecko.
However, Pal insists this turbulence is temporary, describing it as a “window of pain” before a coming liquidity flood. His bullish thesis is centered on the approaching end of quantitative tightening (QT) and the expected return of fiscal spending once the U.S. shutdown comes to an end. The analyst pointed out that roughly $10 trillion in government debt must be rolled over in the next 12 months, calling this “the only game in town.” And when Treasury spending resumes, estimated between $250 billion and $350 billion, he expects liquidity to expand, the dollar to weaken, and risk markets to strengthen.
Pal also predicted that the upcoming CLARITY Act, which aims to provide clearer crypto regulations, could pave the way for wider institutional adoption. Combined with potential rate cuts, changes to bank balance sheet rules (SLR), and global fiscal stimulus from China and Japan, he sees a synchronized macro setup building toward 2026’s U.S. elections, which, according to him, is designed to “goose the economy.”
The market watcher is not alone in his cheery outlook. BitMEX co-founder Arthur Hayes also echoed similar sentiments earlier today, linking Bitcoin’s slide to an 8% drop in U.S. dollar liquidity since July. He said that once Treasury balances fall post-shutdown, dollar liquidity will rebound, pushing BTC higher. Hayes also wrote in the latest edition of his Substack that investors should expect “a choppy market until stealth QE begins.”
Market Still Fragile but Macro Outlook Turning Brighter
The liquidity drain has weighed heavily on digital assets, with the market losing nearly $400 billion this week, pushing total capitalization down to around $3.2 trillion at one point. But despite the volatility, analysts are stressing that the selloff appears technical rather than fundamental, driven by leverage and forced liquidations rather than deteriorating demand.
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Bitfinex Alpha noted that long-term Bitcoin holders are still offloading roughly 104,000 BTC per month, showing profit-taking rather than panic. Meanwhile, institutional traders have stayed cautious, waiting for clearer signals after the Federal Reserve’s October rate cut.
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