Raoul Pal Sees Dollar Weakness as Green Light for Crypto Rally

Real Vision founder Raoul Pal suggests that a weakening US dollar could provide a boost to the crypto market, potentially extending its current rally. He notes that higher bond yields and a strong dollar are currently restricting liquidity flow. “If they can engineer the dollar lower, then we get a green light for further movement in crypto,” he tells Cointelegraph. However, he cautions against excessive optimism, stating he hasn’t given a full green light to all assets.

Pal believes Bitcoin may miss out on much of the crypto economic activity generated by AI agents, which he expects to flow to smart contract platforms like Ethereum and Solana. He highlights that AI agents can now pay for web content using stablecoins through Amazon Web Services, with Coinbase handling payment verification via its x402 protocol.

While AI has been competing with crypto for funds, Pal sees potential for capital rotation into crypto if AI stocks trade sideways. He prefers a scenario where the dollar weakens, the yield curve steepens, and banks expand the money supply through increased lending. However, he acknowledges that borrowing costs have been rising, with the US 10-year Treasury yield climbing to 5.29% in September and the Fed raising its benchmark rate by a quarter-point.

Pal remains cautious about claims that Solana will overtake Ethereum in market value, despite his enthusiasm for both networks. He notes that Ethereum has a greater concentration of capital, with $54.4 billion in decentralized finance protocols compared to Solana’s $6.7 billion. He describes Solana’s core activity as speculation involving smaller transaction amounts.