Prominent macro investor and former Goldman Sachs executive Raoul Pal has issued a bold forecast, predicting Bitcoin (BTC) could rally to approximately $140,000. This projection, representing a 106% increase from current levels, is based on a detailed analysis of global financial liquidity and its historical relationship with asset prices.
Pal argues that Bitcoin is currently trading at a "deep discount" to global liquidity conditions. He identifies a significant gap between the cryptocurrency's valuation and the expansive monetary environment created by central banks. Historically, such gaps have not closed gradually but "violently," leading to rapid, nonlinear price repricing. His rough estimate suggests that if Bitcoin were to realign with prevailing liquidity conditions, the price would be closer to $140,000.
The core of Pal's thesis hinges on a potential liquidity inflection point in Q1 2026, driven by several converging macro forces. First, anticipated changes to bank regulations, specifically adjustments to the Enhanced Supplementary Leverage Ratio (ESLR), may allow banks to absorb more government debt, giving the U.S. Treasury greater flexibility and increasing system-wide liquidity. Second, dynamics around the Treasury General Account (TGA) are in focus, as drawing it down historically sends liquidity flowing back into markets.
Additional supportive factors include a weakening U.S. dollar—often a signal of easier financial conditions—and expanding liquidity from China's balance sheet. Pal believes liquidity is already improving faster than markets are pricing in.
Pal also points to forward-looking business cycle indicators, particularly the Institute for Supply Management (ISM) data, which he suggests could strengthen meaningfully this year. This improvement, combined with factors like fiscal stimulus, tax incentives for investment, and capital expenditure on infrastructure, could boost growth expectations. In such an environment, where growth expectations rise alongside expanding liquidity, Bitcoin and other high-beta assets have historically outperformed.
Despite these improving conditions, Bitcoin has recently lagged. Pal attributes this disconnect to the structural market damage caused by the "October 10 liquidation cascade." This event involved forced deleveraging coinciding with exchange API disruptions, which temporarily removed market makers and liquidity providers, driving prices down further than fundamentals justified. He also cites widespread call-selling strategies clustered around the $100,000 strike price as a source of sustained upside suppression. However, he believes this overhang is now fading.
Pal refers to the final acceleration phase of a crypto cycle as the "Banana Zone"—a period of nonlinear repricing driven by liquidity, improving growth, and renewed capital inflows. He views the $100,000 zone as both a psychological and structural resistance level. Once call-selling pressure eases and positioning remains cautious, the setup for an upside shock strengthens. "Liquidity, in Pal’s view, leads price. By the time consensus turns bullish, the move may already be underway."
In conclusion, Pal describes Bitcoin as a "global liquidity sponge." If global refinancing pressures force further liquidity injections into the financial system, Bitcoin could respond quickly, potentially closing the gap between its price and underlying liquidity conditions and propelling it toward the $140,000 target.
