Bitcoin and gold have long been compared as vehicles for investment and stores of value, but macro investor Raoul Pal provides a fresh perspective that could change how you view their relationship. According to Pal, Bitcoin’s recent underperformance compared to gold is not unusual and may signal a bigger movement in the near future.
Why Bitcoin Trails Gold Initially
Speaking about the cyclical trends in the financial market, Pal explained that gold typically acts as a leading indicator, moving first, with Bitcoin following after a delay. This phenomenon isn’t due to gold itself but rather its reflection of financial conditions within the global economy.
“Financial conditions lead liquidity, and liquidity drives asset prices,” Pal noted. When governments confront rising debt and interest costs, they often introduce liquidity into the financial system. Initially, this capital flows into gold before reaching Bitcoin and other assets later.
The ‘Alligator Jaws’ Pattern
Pal also drew attention to a peculiar trend in the Bitcoin–gold price chart, often referred to as the “alligator jaws.” This pattern shows a significant gap between gold and Bitcoin prices, primarily attributed to crypto-specific market setbacks rather than a disruption of the broader cycle. The good news? Such gaps tend to close as the market corrects itself.
What’s Stopping Bitcoin Right Now?
The crypto market has faced unique challenges lately, including a major liquidation event in October that sent shockwaves across exchanges. These events have left Bitcoin trading sideways, even as gold and equities hit new highs. Pal emphasized that Bitcoin, positioned at the far end of the risk curve, often suffers first when liquidity dries up. However, it also bounces back the quickest when liquidity returns.
Looking Ahead: 2026 as a Pivotal Year
Pal is optimistic about Bitcoin’s future, identifying 2026 as a key year for a potential market surge. This prediction is rooted in his “Everything Code,” a framework that ties Bitcoin’s price trends to global liquidity patterns. A delay in expected liquidity boosts, extended government debt timelines, and unexpected macroeconomic events have all shifted the usual four-year Bitcoin cycle to an estimated five-year cycle.
For those considering an entry into the cryptocurrency market, this timeline could serve as a guide for future planning, especially as Bitcoin works to repair itself after the recent market shocks.
Prepare for the Next Bull Run
The message from Pal is clear: If global liquidity improves, Bitcoin could soon start to close the gap with gold—and quickly. As investors realize their underexposure to crypto during a potential market uptrend, demand may rise sharply. This aligns with predictions for a stronger, more robust cycle heading into 2026.
For investors looking to diversify their portfolios, tools like a Ledger Nano X Wallet can provide a secure way to store your cryptocurrency assets while you await potential gains in this next bullish cycle.
Final Thoughts
Understanding the macroeconomic patterns of assets like Bitcoin and gold can empower investors to make informed decisions. While challenges exist, the opportunity for growth remains compelling. As we move towards 2026, keeping an eye on global liquidity shifts and market trends could be the key to maximizing returns.
