Raoul Pal: The weakening of the US dollar may open the green light for cryptocurrency, as funds are flowing back from AI

Raoul Pal, the founder of Real Vision, stated in the Cointelegraph podcast Trade Secrets that a weaker dollar could signal a green light for the crypto market, driving the industry's upward momentum. He pointed out that rising bond yields and a strong dollar are limiting the free flow of liquidity, and if the dollar can decline, crypto will receive further upward signals. He also mentioned that he would not be overly optimistic and has not given a comprehensive bullish signal for all assets.

Pal believes that when AI trading pauses, funds will rotate into the crypto market. He noted that Bitcoin rose about 25% to $80,000 from August 19 to 25, while AI leader stock Nvidia fell for seven consecutive trading days. His preferred scenario is a weaker dollar, a steeper yield curve, and banks expanding the money supply by increasing lending; if these conditions do not occur, the suboptimal scenario is that AI stocks consolidate, allowing funds to rotate into crypto. He also warned that a burst of the AI bubble means liquidity is being withdrawn, which is unfavorable for crypto.

Regarding AI agents, Pal believes their economic activities will flow more towards smart contract platforms like Ethereum and Solana, rather than Bitcoin. AI agents can pay for network content using stablecoins, and Amazon Web Services launched related features in June, while Coinbase handles payment verification and settlement through the x402 protocol. On the claim that Solana could surpass Ethereum in market capitalization, Pal takes a cautious stance, stating that Ethereum has a higher capital concentration, and Solana's core activities are speculative with smaller transaction sizes.