Raoul Pal Predicts Crypto Market Impact Following US Shutdown Resolution

TLDR 

• The US government shutdown ended after President Donald Trump signed the funding bill passed by Congress.
• Raoul Pal predicts increased liquidity in the market due to massive spending from the Treasury General Account.
• Pal anticipates the US dollar will weaken as the Treasury balance sheet continues to grow.
• The liquidity surge, known as the “Liquidity flood,” will be supported by global fiscal stimulus measures, including in China and Europe.
• The Federal Reserve remains divided on whether to implement further rate cuts, creating uncertainty in the crypto market.

The US government shutdown, which lasted 43 days, ended after President Donald Trump signed the funding bill. This action followed the bill’s passage by both chambers of Congress. Experts are now turning their attention to the future of the crypto market in the wake of the shutdown’s end.

Pal Foresees Dollar Weakening, Crypto Market Shift

Raoul Pal, CEO of Real Vision and a well-known market expert, has weighed in on what comes next. In an update on X, Pal predicted an influx of liquidity due to massive spending from the Treasury General Account. He stated that this increased liquidity would last for several months and would affect both the dollar and the broader financial markets.

Pal also emphasized that the US dollar is likely to weaken in the near term. As the Treasury’s balance sheet expands, the dollar could face downward pressure. The anticipated rise in the balance sheet is expected to influence market dynamics and impact the crypto market.

Raoul Pal also highlighted the “Liquidity flood” as a key event to watch in the near future. He expects other nations, such as China, to expand their balance sheets while Europe will likely add fiscal stimulus. These actions, he believes, will increase liquidity in global markets, including the crypto market.

Pal also suggested that temporary measures, such as term funding, will be used to boost liquidity further. Such moves could affect the overall market sentiment and have implications for digital assets. These developments could be a potential boost to the crypto market, especially amid ongoing regulatory discussions.

US Federal Reserve’s Mixed Signals on Rate Cuts

As the US government shutdown concludes, the focus now shifts to the Federal Reserve’s next steps. Fed policymakers are still divided over the possibility of further rate cuts. Some members, such as Governor Stephen Miran, are advocating for a 50-basis-point rate cut in December, while others, like Mary from the San Francisco Fed, remain uncertain.

Minneapolis Fed President Neel Kashkari has also voiced concerns about mixed economic signals. This uncertainty over rate cuts is causing volatility across various markets, including the crypto market. Investors are closely monitoring the December 10 meeting, where the Federal Open Market Committee (FOMC) will decide the next course of action.

Despite the resolution of the US government shutdown, the crypto market has not seen a strong recovery. Bitcoin, for example, has dipped below $100,000, and several other assets have followed suit. The ongoing uncertainty in both the global economy and US monetary policy is keeping investors on edge.

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