- Liquidity expansion and debt management drive stronger long-term crypto performance.
- Bitcoin has compounded ~100% annually since 2012, Ethereum about 133%.
- Ethereum could soon take momentum from Bitcoin, targeting new all-time highs.
Macro investor Raoul Pal believes the crypto market has entered a longer-than-usual bull cycle, one that could run deep into 2026 as global liquidity expands and debt pressures mount. In his latest interview on Real Vision. Pal said that this cycle “has more runway than people realize,” adding that Ethereum (ETH) looks set to regain momentum over Bitcoin (BTC).
Understanding Why Crypto Will Outshine
Macro Drivers: Debasement, Inflation, and Liquidity
Central banks and governments are increasing liquidity to manage debt at roughly 8% annually. Combined with inflation, this sets an 11% hurdle rate for investments. Assets that fail to meet this threshold lose value in real terms. Bonds and cash fall short, while crypto provides a way to preserve and grow purchasing power over time.
Liquidity as the Dominant Factor
According to Pal, liquidity, not earnings or geopolitics, remains the dominant factor behind asset prices.
He said that liquidity explains about 96% of tech stock variability and roughly 90% of Bitcoin’s. This framework shows why crypto often rises when conventional indicators appear weak, making macro conditions more relevant than short-term noise.
Historical Performance and Crypto’s Edge
Pal said Bitcoin has delivered about 130% annual growth since 2012, even with major drawdowns of 64%, 73%, and 56%. Ethereum has compounded at roughly 133% per year and has consistently outperformed Bitcoin in past cycles.
Early-stage networks like Solana and Sui have delivered steeper gains during adoption phases. Pal argues that concentrated exposure to crypto may be more effective than broad diversification in this environment.
Related: Ethereum Price Prediction: Analysts Track $4,200 Support As Liquidity Clusters Signal Whale Targets
Looking Ahead: ETH vs BTC and Beyond
Pal expects Ethereum to outperform Bitcoin in the current cycle due to its adoption trajectory. However, Bitcoin remains the core of crypto portfolios, providing stability and steady compounding returns.
Echoing Pal’s view, another analyst said Ethereum looks ready to take momentum from Bitcoin. If ETH breaks its short-term highs, it could move toward setting a new all-time high. It seems very likely that we’ll be getting into a stage that $ETH is going to take over the momentum from $BTC,” Poppe said.
Related: Ethereum Foundation Converts $4.5M in ETH to Stablecoins via CoWSwap
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Source: https://coinedition.com/ethereum-set-to-outrun-bitcoin-again-this-cycle-raoul-pal/
