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ZEC $1,326 Raoul Pal says capital is rotating back to crypto from AI stocks
The Real Vision founder says a pause in AI stocks and a weaker dollar could open the door for crypto, while AI agents favor Ethereum and Solana.
Key takeaways
- The rotation case. Pal says BTC rose about 25% to $80,000 between Aug. 19 and Aug. 25 while Nvidia logged seven straight losing sessions.
- Liquidity stays tight. He says the US 10-year Treasury yield climbed to 5.29% in September and the Fed raised its benchmark rate by a quarter-point.
- Address counts differ. Pal notes Solana had about 3.2 million active addresses versus Ethereum's 387,000, while Ethereum holds $54.4 billion in DeFi.
What happened
Raoul Pal, founder of Real Vision, says money is starting to leave AI stocks and return to crypto. He made the case on Trade Secrets, a Cointelegraph show, arguing a pause in the AI rally could help crypto draw in capital.
He points to bitcoin's recovery between Aug. 19 and Aug. 25, when BTC rose about 25% to $80,000. In the same window, AI bellwether Nvidia logged seven consecutive losing sessions.
He says liquidity is not flowing freely yet. He cites the US Dollar Index at the year's highest levels, a 10-year Treasury yield that climbed to 5.29% in September and a quarter-point Fed rate rise. A lower dollar, he says, would give crypto a green light.
Why it matters
The rotation matters because it shows how tight liquidity is. Pal's second-best outcome is sideways AI stocks that free capital for crypto. He says an actual AI stock crash would not help, because a bust means liquidity is pulled from the system, and things do not go bust when liquidity is plentiful.
Pal expects AI agents to steer activity toward smart contract networks. He cites an Amazon Web Services feature from June that lets agents pay for web content with stablecoins, with Coinbase verifying and settling payments via its x402 protocol and USDC on Base among supported options. He expects Ethereum and Solana to gain activity, bitcoin misses much of it.
What the data shows
- Solana recorded about 3.2 million active addresses over a 24-hour period on Monday, against 387,000 for Ethereum, according to DefiLlama.
- Ethereum holds about 54.4 billion dollars in decentralized finance protocols, compared with 6.7 billion dollars on Solana.
- Pal compares the networks with what he calls economic density, or total value locked divided by active users.
What is still unclear
- Whether Solana can pass Ethereum in market value is unresolved. Multicoin Capital co-founder Kyle Samani said last month that SOL would surpass ether's market cap this cycle, Pal said Samani needs to hold his horses a little bit, though it is possible.
- Pal called a million-dollar bitcoin by 2030 a meme but said he would not rule it out by 2032.
Questions readers ask
What did Raoul Pal say about crypto and AI stocks?
He says capital is starting to rotate from AI stocks back into crypto, pointing to bitcoin's roughly 25% rise to $80,000 between Aug. 19 and Aug. 25, when Nvidia fell for seven straight sessions.
Which cryptocurrencies could benefit from AI agents?
Pal expects Ethereum and Solana to attract more activity as AI software transacts through their smart contracts, and says bitcoin will miss much of it.
Why does the US dollar matter for crypto?
He says the strong dollar and higher bond yields are keeping liquidity from moving freely, and that a weaker dollar would be a green light for crypto.
Could Solana overtake Ethereum?
Multicoin's Kyle Samani predicted SOL would surpass ether's market cap this cycle. Pal said Samani needs to hold his horses a little bit, though he said it is possible.
