The Greatest Macro Opportunity of All Time? at Sui Basecamp 2025 in Dubai

0:00Hi, I want to talk to you today about my friends of Bitwise and why they're the best crypto asset manager out there. I've talked on the show often about how crypto is reshaping everything from finance, portfolios, and even macro. Everything's ramping up. We've got tailwinds in DC, interest from TradFi, and growing optimism. But smart investors see all of this and focus on the how. What's the savviest way to seize this moment? And that's why so many investors I know are working with Bitwise today. They've been all in on crypto since 2017. They're OGs. They've got more than 30 products to help investors like you get access to whatever they need or want.

0:37They've got a team of more than 100 across the US and Europe, and they have over 10 billion in client assets. You know, a lot of people know Bitwise for their ETFs, you know, how they manage the world's largest crypto index funds and the wide range of crypto ETFs they have. But not as many people realize Bitwise manages private alpha strategies too, and has SMAs for large investors, and is one of the largest institutional Ethereum staking providers. They really do everything. These guys are true OGs in the space, and they're good friends of mine too. So please go and check out Bitwise. They're really excellent.

1:08Go to bitwiseinvestments.com and see all that they've got to offer. That's bitwiseinvestments.com, or just email them at james at bitwiseinvestments.com and let them know that Raoul sent you. Anyway, there's a million ways to access crypto. Explore how you can access it best with Bitwise. And remember, carefully consider the extreme risk associated with crypto before investing. Anyway, thanks so much. Hi everyone, I'm Raoul Pal, the CEO and co-founder of Real Vision. Here at Real Vision, we're committed to give you the best knowledge, tools, and network to help you succeed in your financial future.

1:43If you're enjoying this podcast, please take a moment to give it a five-star rating. It truly helps us continue to bring top-tier content. Thank you so much. Hi, I'm Raoul Pal, and welcome to my show, The Journeyman, where I travel to that nexus of understanding between macro, crypto, and the exponential age of technology. Actually, wait, I need to fess up. It's me, Palvatar, Raoul's AI avatar. Raoul is in the midst of a bloody hectic travel schedule, so you're all stuck with me today. But boy, do we have a treat for everyone. Today, we're releasing Raoul's presentation that he gave last week live in Dubai at Sui Basecamp 2025.

2:21It's got Raoul, it's got charts, and it's got bananas. What else do you need? So with that said, let's get to it. And Raoul will be back next week with an all new episode. Join me, Raoul Pal, as I go on a journey of discovery through the macro, crypto and exponential age landscapes. In The Journeyman, I talk to the smartest people in the world so we can all become smarter together.

2:56Okay, so I'm going to go through some slides that will give you an idea of where we are in the economy and where we are in markets, just to steady everyone's nerves, because all everybody sees is headlines, the world's going to shit, everything's going to die, the world is going to war, all of this stuff. The reality is, is it something much better? Let's see if I can figure this out. So firstly, I use a framework that I call the everything code. It's something that I spent 35 years building in macro, where I started to realize that the dominant factor in all of macro is actually liquidity and the debasement of currencies.

3:38And it explains most price movements in all of the assets that we care about. And I realized this all to do with debt. And it came from the why we're seeing four year cycles in crypto and the economy and all of these things is actually driven by the debt refi cycle. The world just reached too much debt back in 2008. And what we've been doing since then is servicing the debt. We've also got some other key factors. This chart is a chart that I produced a few years ago. It's still the single most important chart in Macron and explains everything that is going on in our world today. And this is the fact that demographics is everything.

4:20And the demographics of the aging populations across the Western world, these are the US numbers using the labor force participation rate, explain the buildup in debt. Why that is, is as populations get older, economies slow down. To service the existing debt, it requires more debt. To create GDP growth, you need more debt. See, GDP growth is driven by population growth, productivity growth, and debt growth. And debt growth has been the driver both in the US, in China, in Europe, in the UK, all across the world. It's all driven by the say dynamic, and that's this aging population thing. It slows down GDP growth and creates unstable economies.

5:00And that chart just shows the stunning correlation between debt to GDP and population itself. What's interesting is then when you go one stage further and say, okay, we're seeing this debt, how are we dealing with this debt? And it's actually just driven by liquidity. So here I'm using Fed net liquidity. Fed net liquidity is the balance sheets of the Federal Reserve, the Treasury General Account, which is the Treasury themselves, not the Fed, and then the reverse repo facility. These are the levers that they've been using. It started just using the balance sheet 2009, all the way through to about 2014.

5:43It was just using the balance sheet. Then they started sneaking in new ways of debasing currency. And that was by adding in these other levers, getting banks to put reserves here or take reserves out there or injecting money into the economy via the checking account, the Treasury General account. That's actually shifted to total liquidity now because everyone figures out the gain, which is the debasement of currency, debase the currency, try and grow GDP growth and lower debts of GDP or just manage it. Now they're using total liquidity, which includes measures like M2, which is the banking system as well.

6:21So when you add those things up, this has, and I'll show you these charts later, the most stunning correlation of all time to all assets. So 90 % of Bitcoin's price movements are driven by total liquidity and 97 % of the NASDAQ. Hi, Raoul here. Listen, I think we've got until 2030 before the economic singularity arrives. Now, it might not be the exact date, but it's around then. So we have about six years to figure out how to unfuck our future. I've put together a report to help you called Prepare for 2030. It's going to help you take the first steps in that journey to make sure you're secure past 2030.

7:04So just click on the link below and start your journey now. So here's the real issue here. Why are the rich getting richer, the poor getting poorer? Well, scarce assets keep going up in price. Real estate, equities, art, gold, all of these things. Young people can't afford it, poor people can't afford it because they've got variable income, which is earnings, and it buys them less of these every year. What's actually happening, what that mechanism is, is a tax on everybody of 8 % a year. A global taxation of 8 % a year that you don't understand, you just don't get richer by 8 % a year. Add in another 3 % global inflation, you're at 11 % debasement of currency.

7:48That's your hurdle rate to stay as wealthy as you are today. That's a staggeringly difficult thing, considering most asset classes don't produce those kinds of returns, which is why so many young people have come to crypto, because crypto completely upends this system. They can't buy houses. They can't buy all of the other things that older people were able to afford. So they forced into more speculative, high-risk assets that have much higher returns. It's the only way out of the trap. And the trap is driven by this debasement. So if you want to see how close the correlation is, and I'll say the full correlation chart later, it basically drives Bitcoin.

8:28And what we see is there's periods where it decouples, and these are the banana zones. It decouples when what we get is the retail frenzy and the frenzy into the market, cools off, comes back to trend rate of this debasement of 8 % or so. but over time it produces astonishing returns and that's why bitcoin looks like this on the log regression channel it's also still remarkably cheap where it ends up at the end of the banana zone is usually the one or two standard deviation uh level we're a long way from that and that would give us much higher prices you can't see it on this but if it were to get to two standard deviations that'll put bitcoin at eight hundred and fifty thousand dollars i don't think it's going to go there.

9:10But what we're saying is there's plenty of upside to come. I know people get frustrated in sideways markets. It's just the nature of the beast. It does nothing, corrects for a while, corrects for a while, and then explodes out of the traps. And we're kind of in that phase now that I'll talk to you about. When we talk about debasement of currency, you can't see this very easily. But at the top here is, well, these are all of the asset classes that we monitor at XPAM, my asset management firm, and you can see that most of the returns of US small caps, REITs, treasuries, preferred stocks, high-yield bonds, they're all annualizing at less than 10 % a year returns.

9:52So owning those assets makes you actually poorer because of the debasement. Once you get to the S &P 500, you're at 12%. Basically, you break even. Divide the S &P 500 by global total liquidity. It's basically a flat line. So owning US equities in the broadest sense makes you no money either. So all of the millennials have been piling money into 401ks and not getting richer. So none of their 401ks will buy them as much of a house and stuff like that. Only when you get to technology investing, do you start beating the benchmark. Have you ever wanted to trade Bitcoin but haven't dared try? With Plus500 Futures, you can trade crypto without the hassle of opening a wallet.

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11:13With over 20 years of experience, Plus500 is your gateway to the markets. Visit us.plus500.com to learn more. Trading in futures involves the risk of loss and is not suitable for everyone. Not all applicants will qualify. Plus500. It's trading with a plus. And so this realization from the Everything Code is debasement of currency. There are only two assets that matter in the entire world. One is technology and two is crypto. And crypto dwarfs everything else. It is the greatest performing asset in all recorded history. We've never had anything like this before. So here's Bitcoin since 2012, 130 % annualized.

11:54That's including three gigantic drawdowns. um ethereum at 113 and solana at 142 so and solana obviously starts later so the magnitude of the returns is enormous the volatility we have to stomach to do it is the gain and it's a matter of you know i've told everybody about the don't fuck this up thesis of how to deal with volatility how not to lose control of your tokens because this stuff compounds over time Bitcoin since 2012, 27.5 million percent returns. Again, nothing ever has remotely climbed close to this. So that's the opportunity. And we said the tech stocks, they're great. And Bitcoin or crypto is great.

12:42Fantastic. Then you look at the Nasdaq versus Bitcoin, it's down 99.94%. Crypto is a super massive black hole that simply outperforms and sucks every other asset dry. This is the big one, the biggest one we've ever been given, the greatest macro opportunity of all time. We've got the central bank's debasing currency, which is giving us a gigantic tailwind. they don't want the system to break. So every time something happens, they inject more liquidity. So they're giving you free money. And to take that money, you need the volatility. So what causes the volatility? Well, it's actually driven by liquidity again.

13:23Once you come to narrower time horizons, liquidity changes things. So we've just gone through a three-month period of the market feeling shit and everyone's saying, it's all over. We're never going to have alt season. Everything is terrible. We're all going to die. What was actually happening was the fact that in Q4 2024, financial conditions tightened. And we measure financial conditions by the dollar, rates, interest rates, and oil. All of those went up in Q4. And there's a three-month lag, and it drives it. So here's a simple way. We're now seeing people saying the economy's slow, shipping slow, all of the tariff stuff.

14:04The markets priced in this tariff stuff last year once they saw the probabilities of a Trump re-election. So what we've got here is the economic surprises index of the US versus other countries in the world. When it's going down, the US is underperforming in economic surprises term. When it goes up, it outperforms. It's basically just following the dollar in rates. And what it's saying is whatever noise we're seeing now in the economic data, which is some of the tariffs related stuff as people have built inventories very quickly, liquidity is going to completely erase that very quickly. We saw it exactly in 2017 when Trump imposed similar tariffs, similar backdrop.

14:53The dollar and rates fell. And what we saw back then was the same collapse in the economic surprises index. We had talks about recession all over again back then. Trump's going to create a recession. Then what happened was the liquidity conditions drove all economic data higher. And when we look at that economic data, Bitcoin's already priced it in. It's already priced in, weaker than the economic data itself. So what are we fearing right now? What are people worried about? People are worried about what they're doing is creating narratives for today to explain liquidity conditions from three months ago.

15:31That's the ridiculousness of what goes on on Twitter all day, is the lack of understanding of what actually drives these markets. What are the dominant factors. The dominant factor is financial conditions, which lead liquidity, which lead markets. And even in markets, gold actually follows financial conditions the closest. Then with a lag, it becomes crypto and tech. Then with a lag, it becomes the S &P 500, cyclicals, commodities, all of those things. So people are talking about recession now. We've had this negative GDP print. A lot of this is technically driven by the imports that are happening to load up on inventories as tariffs come so people don't have the price shock.

16:13Okay, fine. So most of this is going to get unwound. Why? Because global growth is about to pick up super fast. So the Philly Fed, this whole presentation was put together a week and a half ago to send here. So it's all out of date. So the Philly Fed latest numbers came in exactly as predicted by us by this chart. It's actually quite useful because I just went through this deck this morning and all of this was from two weeks ago and it's all proven to work so philly fed comes down now so what we should see is now an increase in economic activity going forwards so i the back end of the year is going to look very different than the first quarter did i use a lot of technical analysis i didn't do it on economic data which is abhorrent to most people but it's worked for me for 35 years and i use this is a system called demarc indicators and basically it's telling you that we should see the economic surprises starting to rise.

17:11Bitcoin is led by financial conditions here by three months, the year-on-year rate of change of Bitcoin. We should start to see very dramatic movements in the price of Bitcoin going forwards. I'll show you a bit more about this in a sec. And to go back to that idea that the Trump cycle is repeating, I mean, it's an incredible repeat, but more powerful even than 2017. Those of us who were in crypto in 2017 That's when I made the mistake Around this time of year Thinking, you know what? I'm going to sell my Bitcoin at 2 ,000 I bought it at 200 in 2013 It went to 20 ,000 at the end of the year And I felt like a complete moron And I managed to buy it back In the sell-off in COVID And I bought it back at 6 ,500 So I sold it at 2 ,000 And bought it back at 6 ,500 That's how not to do things That's called fucking it up too forward.

18:03And so I'm trying to teach you how not to do that. So the dollar, Trump last time around, same thing, the markets priced in tariffs, the dollar screened higher. It created this weak patch of growth. Trump came out and said the dollar's too high. Guess what? Scott Besant, who's a macro hedge fund manager, I've known him for 20 years, 25 years. He understands the game. Trump said the same thing. Everyone said the same thing. The dollar's too strong. And hey, presto, the dollar has utterly collapsed. And we haven't started yet. And it's a cyclical thing. It's not the end of the dollar. That's another narrative you read.

18:36There can't be the end of the dollar right now because 87 % of world trade is in dollars and 50 % of the entire world's debt are in dollars. So that's 200 % of global GDP is actually in dollars. So there's a shortage of dollars globally, and that won't go away for a long time. So the dollar's collapsing. This kind thing is a massive tailwind. As the dollar weakens, it means that the more global exports pick up, everybody who's a foreigner who services US government debt, it's cheaper to service the debt, cost them less of their domestic currency cash flows. So it's a very powerful setup. A weak dollar is incredibly good for world growth.

19:13It allows China, everybody else to start exporting, the whole world economy starts picking up. The last time this happened, the Trump cycle, Well, that was the initial correction that we got. We had this whole period of correction, much like we've had now. It stopped in about March. Well, we got to about April. And then we did this. And from that correction low, it did a 23x. Now, I don't expect Bitcoin to do a 23x because this was much earlier in its adoption curve, but some of the others will. something close to it. We've got a perfect setup, one of the best setups I've ever seen, because we know the debt has to be rolled.

19:54We know the forward-looking liquidity is coming, and we know how assets react to it. Just like having a crystal ball, nothing will be perfect, but directionally, it should be right. So let's look at this liquidity cycle, break it down a little bit. So when you look at it, Global M2 is a good proxy for total global liquidity. Why I use this on these charts is it's more real-time. Total global liquidity takes longer to calculate for the various data inputs. But Global M2 does a very good job. Again, like the dollar version, this is wildly outperforming what happened at the Trump previous cycle. So we've got plenty of dollar liquidity.

20:35Global M2 is driven by two things, the dollar itself, which is why it's accelerating so much. And then the global financial system, that's the banks and what they're doing now um all of the governments around the world and the central banks are forcing the banks to buy debts basel 4 is the reason behind that the new changes to the slr in the us all of this is a way of forcing bonds and debts into the banking system and then forcing the banks to create more money using them as reserves it's just another way of debasing the currency. So GLIMM2, when we look at it outright, it does the same pattern every time.

21:15These patterns repeat not out of voodoo. It's because it's driven by the debt refi cycle. The average maturity of global debt is four years. They're all between the three and five year sector. There's some long-term debt. Nobody can issue long-term debt because the market won't absorb it. So what we find is we're shorter term. Every time we do this, we have a breakout, a retest. So this was the 16, 17 cycle. This is the equivalent of what I think now. Breakout, retest, explodes higher, does this whole liquidity tightening. That's the bear market. That's when the economy slows down. That's when rates go up.

21:50Does the same thing. COVID gave it a false, you know, a double shot. It did it again. We're doing exactly the same thing. It's almost a complete repeat of the 2017. So what we're seeing is global limits who are all-time highs. That should mean all-time highest RASA prices. That's how the world works. What we've also got here is GlobalM2 against Bitcoin. So it's the same chart, but now we can see what happens to Bitcoin every time this happens. It breaks out, retests, breaks out, retests, and then Bitcoin starts hitting the next leg of the banana zone. Usually you start the banana zone a bit earlier with the breakout, you have the correction, and then it goes.

22:27And I've talked about this as three phases of the banana zone. Phase one was Q1 last year, as we started to break out in all these measures, new all-time highs and liquidity. Bitcoin goes to all-time highs. We have the corrective period, which is the correction zone. And then we get the banana zone part two, which is usually old season. This is the fabled chart that everybody in the world has copied from me, but this is the global M2 chart versus Bitcoin with a 12-week lead. It's been like voodoo. It is the most voodoo-like chart I've ever come across, and it works. Will it work entirely? Often what you find is later on, Bitcoin outperforms GlobalM2 because of the speculative mania that builds over time as people realize what's going on.

23:11What it tells us is the back end of this year is basically a one-way street with a few corrections. The corrections will be normal. You will be questioning me saying, is it all finished? Is the banana zone finished? Is it all over? Do I need to get out now? and generally speaking, just follow the money. It really is that simple. The other thing is, okay, well, with the dollar and the banking systems doing this, well, the other thing that's doing it is the central banks. China is starting to print money. China has, I think, by my measure, three to four trillion to print, but they need the weaker dollar.

23:49They need to agree the tariffs with the US in exchange. The US will continue to weaken in the dollar, they will allow the dollars into the Chinese system so they can refile all of the dollar debts. And a lot of China debts, all of the corporate debts are in dollars. So what happens is we're starting to break out and that adds to this push of liquidity. So it's not just the weaker dollar itself. It's not just the banking system, but it's the central banks starting to pump liquidity into the system as well because they've all got to roll the debt. And that's why it's so cyclical. every time the total global liquidity index breaks out, again, the same thing with M2, the market goes higher.

24:34And the reason being is I talked about the correlation. Well, here's the chart. It's a 90 % correlation with weekly global liquidity. That's Bitcoin. And the Nasdaq is a stunning 95%. And so it's hard to refute that this is not what is happening. It's so obvious, but most people want to refuse to believe it. They start mid-curving the whole thing, saying, well, that's not the printing of money and this is not how it is. It's so clear in the data. It's so obvious that this has been going on. And even when you listen to Scott Besson speak or Janet Yellen speak, they all talk about this. They talk it about in the terms of basically the everything code framework.

25:16Business cycle. Business cycle is currently weak. the business cycle is the most important cyclical factor. It drives, it's part of the global liquidity construct. So the business cycle actually came out today or yesterday at 48.7, slightly weaker as we've been expecting. Bitcoin's already priced it down to 47.4. So Bitcoin's already priced in the bad news. But the good news is financial conditions lead by nine months. It's a very useful tool. And it's telling us that we're going to see the business cycle pick up super strong. And this will keep going. I think we'll end up in the 60s. It also prices Bitcoin by doing this.

26:00And so when you look at Bitcoin itself, the moment the ISM, we've had this very low period of ISM, and that was driven by this very flat dollar and also by rates staying higher than normal. But as the ISM starts crossing 50, economic growth comes back, earnings come back, household earnings come back, stuff gets reinvested in markets. So at this point is when Bitcoin super accelerates. And that point lies ahead. We're about to see that point now. Now, we haven't shown it on this presentation, but we've also imputed how it reacts to ISM. And if we get to that 57 ISM, that puts Bitcoin at 450 ,000.

26:41Is it exact? Will it be exactly that? No. But all of the people are saying it's going to 150, 250 are probably scarred from last cycle without looking at the forward-looking data. So it's incredibly positive for me. It also is what drives altcoin season. So the fabled altcoin season, everyone's like, it's never going to happen again. It's just a function of the business cycle. Why? Because household earnings are still subdued, because the business cycle is subdued. Average businesses outside of technology have subdued earnings. The moment the business cycle picks up, everyone has spare cash. cash gets recycled into assets.