A weaker US dollar could give crypto a fresh "green light" and help extend the sector’s rally, according to Real Vision founder Raoul Pal, who said high bond yields and dollar strength are still preventing liquidity from moving freely through markets.
Speaking to Cointelegraph on the latest episode of Trade Secrets, Pal said, "If they can engineer the dollar lower, then we get a green light for further movement in crypto." He added, "I don’t want to get overly excited, so I haven’t got a full green light on everything."
The report noted that the US Dollar Index has been trading at the highest levels seen this year, a backdrop Pal views as central to the liquidity picture for digital assets.
He also said Bitcoin is unlikely to capture much of the crypto-related economic activity created by AI agents. In his view, that flow is more likely to move toward smart contract platforms such as Ethereum and Solana.
Pal is one of the better-known veteran voices in crypto markets. He previously worked in hedge fund sales at Goldman Sachs in Europe and later co-managed a global macro fund at GLG Partners. He launched the research platform Global Macro Investor in 2005 and co-founded financial media company Real Vision in 2014. Pal said he first bought Bitcoin in 2013 after applying a gold-based valuation framework to the asset.
An AI pause could give crypto room to catch up
Pal said Bitcoin’s cycle recovery arguably took shape between Aug. 19 and Aug. 25, when BTC rose about 25% to $80,000. Over the same stretch, AI bellwether Nvidia posted seven straight losing sessions.
That pattern, he said, suggests pauses in the AI trade have allowed capital to rotate into crypto. "You can tell there’s this sort of rotation for liquidity that’s around right now, which means it’s not abundant yet," Pal said.
Cointelegraph noted that Bitcoin rallied in August while Nvidia shares fell.
Even so, Pal does not see an AI crash as a positive outcome for crypto. While AI has been competing with digital assets for capital, a bursting AI bubble would be unwelcome because it would show liquidity being "sucked out of the system" and would damage the conditions crypto needs to rise.
"Things don’t go bust if liquidity is plentiful," he said.
His preferred macro setup is a weaker dollar, a steeper yield curve and banks expanding the money supply through more lending.
For now, borrowing costs have continued to move higher. The US 10-year Treasury yield climbed to 5.29% in September, and the Federal Reserve raised its benchmark rate by a quarter-point.
If those more favorable conditions do not arrive, Pal said his "second best scenario" would be for AI stocks to move sideways, giving capital room to rotate into crypto instead.
AI agents may send more onchain business to Ethereum and Solana
Pal said AI agents could become a meaningful source of blockchain activity, with Ethereum and Solana positioned to benefit more directly than Bitcoin.
The article said AI agents can already pay to access web content with stablecoins through a feature introduced by Amazon Web Services in June. Coinbase handles payment verification and settlement through its x402 protocol, and USDC on Base is among the supported payment options.
Pal said agents could eventually raise operating capital by issuing tokens to fund projects that might last "a week, a month, a year," then carry out the work and generate returns.
As software starts using smart contracts to transact, he said, Ethereum and Solana could draw more activity. "My guess is they’ll get more adoption over time as AI uses them," Pal said.
Solana needs more than activity to pass Ethereum
Although Pal is positive on both Ethereum and Solana, he said Ethereum’s heavier concentration of capital makes him cautious about claims that Solana will overtake it in market value.
Last month on Trade Secrets, Multicoin Capital co-founder Kyle Samani predicted that SOL would surpass Ether’s market capitalization "this market cycle."
Pal said Samani "needs to hold his horses a little bit," though he also acknowledged that such an outcome is possible.
On the metrics, each network leads in different areas. According to DefiLlama, Solana recorded around 3.2 million active addresses over the previous 24 hours on Monday, compared with Ethereum’s 387,000. But Ethereum had about $54.4 billion in total value locked across decentralized finance protocols, far ahead of Solana’s $6.7 billion.
Pal said he compares the two networks using what he calls "economic density," calculated by dividing total value locked by active users. By that measure, he said, Ethereum attracts more capital relative to its user base, while Solana’s activity tends to involve smaller amounts.
"Solana’s core activity is speculation," he said. "It’s just smaller clip sizes."
Pal also said he has stopped giving public price targets because his forecasts are often clipped and recirculated online. He described the idea of $1 million Bitcoin by 2030 as a "meme" that reflects rising adoption, ETF interest and Bitcoin’s use as collateral.
"Does it make a million bucks? I don’t know, but certainly by 2032, yeah, I don’t have an issue with that," he said.