Pal: Bitcoin 87% Correlated With Global Liquidity

Raoul Pal, founder of a financial media platform and a former Goldman Sachs hedge fund manager, posted on X that bitcoin shows an 87% correlation with global liquidity and that the Nasdaq’s correlation is 97%. He wrote: “Bitcoin is 87% correlated to global liquidity. The Nasdaq is 97% correlated. Which tells you something most people never realise. These assets are not really trading on earnings, or news, or whatever the story of the week is. They’re tracking the amount of money in the system.”

Pal described global liquidity in standard market terms: central bank balance sheets, global M2 measures of money supply and bank credit growth. He argued those measures capture the pool of money that can move into risk assets.

Pal reiterated a view he set out in May 2026 that links recurring central bank interventions to short-term government debt cycles. He has placed a conditional price target of $450,000 for bitcoin if central banks expand their balance sheets significantly before the end of the year.

Trading firm Keyrock has produced a model that tracks how Treasury bill issuance affects bitcoin returns with an eight-month lag, a framework that aligns with Pal’s liquidity argument. Keyrock also calculates a net liquidity gauge by subtracting Treasury cash balances and reverse repo balances from the Federal Reserve’s balance sheet to estimate how much spending capacity reaches markets.

Some market participants point out the correlation figures posted by Pal lack a published dataset and a detailed methodology. Analysts note the strength of the bitcoin-liquidity relationship varied through 2026 as liquidity impulses rose and fell, and that an eight-month lag implies current prices can reflect conditions set months earlier.

Michael Saylor, executive chairman of Strategy Inc., has offered a similar view, citing ETF inflows, corporate treasury purchases, sovereign reserve allocations and global liquidity as dominant drivers for bitcoin going forward rather than miner issuance.

Pal and other proponents say the next test of the liquidity thesis is whether central banks expand balance sheets enough to sustain larger capital flows into risk assets. If they do, Pal maintains his $450,000 target could remain within reach; if they do not, he expects bitcoin’s price path to diverge from that projection.