Macro investor Raoul Pal has provided a detailed analysis of Bitcoin's recent underperformance relative to gold, framing it as a typical pattern within global liquidity cycles rather than a sign of weakness. He explained that in past cycles, gold tends to move first, with Bitcoin catching up later, a dynamic he attributes to the broader business cycle and financial conditions.
Pal emphasized that the relationship is not about gold itself, but about liquidity. "Financial conditions lead liquidity, and liquidity drives asset prices," he stated. When governments face rising debt costs, they inject liquidity into the system, which eventually flows into asset markets. Historically, gold reacts first, followed by Bitcoin with an approximate six-month lag. Pal noted that if you chart Bitcoin's price against gold's with this lag, the two align closely.
The current divergence, which Pal describes as "alligator jaws," is attributed to crypto-specific market damage from a major liquidation event in October 2025, not a broken cycle. He believes the crypto market is still repairing from that shock, which explains Bitcoin's sideways trading while stocks and gold hit new highs. "Crypto sits at the far end of the risk curve," Pal said. "When liquidity disappears, it gets hit first. But when liquidity returns, it also tends to recover the fastest."
Pal argues that most investors are currently "underowned" in crypto, with many believing the bull cycle is over. He expects a rapid chase for exposure if prices begin to move upward again.
Looking ahead, Pal highlighted why 2026 could be a pivotal year for Bitcoin. His "Everything Code" framework, which ties roughly 90% of Bitcoin's price movement to global liquidity, suggests a delayed cycle. He explained that expected liquidity boosts in 2025 did not materialize as governments extended debt timelines, effectively stretching the cycle from four to five years. If global liquidity improves as anticipated, Bitcoin is poised for a significant catch-up move.
In a separate but related analysis, data shows that despite recent consolidation around $90,000, Bitcoin has significantly outperformed gold since 2022. ETF analyst Eric Balchunas highlighted that Bitcoin has risen more than 400% since 2022, compared to gold's increase of under 200%. Analysts link much of Bitcoin's earlier gains to the anticipation and rollout of spot Bitcoin ETFs, which created a new market structure with holdings amounting to hundreds of thousands of BTC. This institutional adoption has made price movements less explosive but more resilient, even amid macroeconomic uncertainty and derivatives market liquidations.
