Macroeconomist Raoul Pal identifies the main growth driver for the crypto market

The expert believes that the price of bitcoin directly depends on the increase in the global money supply

13.07.2022 - 09:00

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What’s new? Raoul Pal, a former executive of the investment bank Goldman Sachs and Real Vision TV CEO, reported on Twitter that bitcoin and the cryptocurrency market, in general, are heavily influenced by a single macroeconomic factor. In question is the M2 monetary aggregate or a measure of the global money supply.

So, I like growth tech but love bonds but clearly there are always risks to this view. This is how I see the balance of probabilities. What about digital assets?From a macro perspective, the big driver is global M2 growth. pic.twitter.com/K8nXkGx0nk— Raoul Pal (@RaoulGMI) July 10, 2022

How does M2 affect the markets? M2 is a measure that takes into account the global aggregate of cash in circulation, non-cash funds in accounts, money market securities, and other easily convertible assets. According to Pal, an increase in M2 is the main growth driver for the cryptocurrency market.

Macroeconomist Lyn Alden holds a similar position. In her view, the growth in M2 is beneficial to the value of the first cryptocurrency.

Earlier, analysts at Saxo Bank cited macroeconomic changes, the introduction of regulation, institutional acceptance, and possible competition with central bank digital currencies (CBDCs) as drivers of cryptocurrency rates’ growth.

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