Millionaire Raoul Pal explains why Bitcoin hasn't yet reached $200,000.
Raoul Pal, founder of Global Macro Investor, pointed out a frequently used chart in the market that shows Bitcoin (BTC) has been moving in parallel with the global money supply M2 for a long time.
The model in question showed that Bitcoin reacts to changes in M2 with a lag of approximately 12 weeks, and predicted that if this correlation continues, BTC could reach $200,000 by the end of 2025.
However, Pal argues that this relationship broke down starting on July 16. While global M2 continued to rise, Bitcoin traded sideways all summer. According to Pal, this was not due to the model becoming outdated, but rather to liquidity restrictions implemented by the US Treasury Department through the Treasury General Account (TGA).
The NPL is the US government's main operating account at the Federal Reserve, where tax revenues, bond sales, and other cash flows are collected and used to cover federal spending. Pal noted that since July, the Treasury has replenished the NPL by issuing approximately $500 billion in bonds, bringing the balance to a multi-year high of approximately $800 billion. Due to this liquidity drain, cryptocurrencies have been the hardest hit among risky assets.
Pal predicts that the TGA has already strengthened sufficiently and that the liquidity shortage will completely disappear by the end of the month. He argues that Bitcoin could return to its M2-driven growth trajectory once market conditions normalize.
Source: cryptonews.net
