Raoul Pal Says Bitcoin Is 87% Correlated With Global Liquidity, Not Headlines

A Detailed Explanation

Raoul Pal, founder of financial media platform Real Vision and a retired Goldman Sachs hedge fund manager, is among the most closely followed macro voices in crypto. Over the past seven months, he has repeatedly argued that liquidity conditions, rather than fundamentals, are the main driver of digital asset prices.

In a post on X, Pal said:

“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.”

Global liquidity refers to the total pool of money available to flow into financial markets. It is typically measured using central bank balance sheets, global M2, or broad money supply, and bank credit growth.

Analysts at crypto market maker Keyrock have developed an eight-month lag model that tracks how Treasury bill issuance feeds into bitcoin returns, a framework that aligns with Pal’s broader correlation argument. The firm’s net liquidity gauge, defined as the Federal Reserve’s balance sheet minus Treasury cash balances and reverse repo balances, is intended to isolate how much spending capacity is actually reaching markets at a given time.

For traders and market watchers, that framing matters because it shifts attention away from day-to-day news flow and toward the timing of money entering or leaving the financial system, which can leave asset prices reacting to earlier policy and funding conditions rather than current headlines.

A Familiar Thesis, Refreshed Numbers

Pal’s latest figures extend a view he laid out in more detail in May, when he told Real Vision viewers that bitcoin maintains roughly 90% correlation with global money supply. He argued that governments’ reliance on short-term debt issuance forces central banks to inject liquidity on a recurring cycle.

“Every four years, global debt rolls over, and central banks are forced to pump liquidity to avoid systemic collapse,” Pal said at the time.

That thesis supports his $450,000 bitcoin price target, which he has said depends on central banks meaningfully expanding liquidity before the end of the year.

The updated correlation figure also keeps attention on how market participants assess macro signals in real time. If liquidity remains the main lens, then shifts in central bank balance sheets, Treasury funding, and money-market conditions may matter more to bitcoin’s trend than the news cycle surrounding the asset itself.

Nasdaq’s Even Tighter Correlation

The more striking figure in Pal’s post may be the 97% correlation he assigned to the Nasdaq, the tech-heavy U.S. stock index. A correlation that high would suggest bitcoin and mega-cap tech stocks are effectively trading as proxies for the same liquidity conditions, rather than as separate asset classes reacting to distinct catalysts.

That view runs counter to the idea that bitcoin trades primarily on its own supply dynamics, halving cycles, or adoption headlines.

Pal is not alone in advancing that argument. Earlier this month, Strategy Inc. (Nasdaq: MSTR) Executive Chairman Michael Saylor said bitcoin’s traditional four-year, halving-driven cycle is “no longer the dominant model,” pointing instead to ETF inflows, corporate treasury accumulation, sovereign reserves, and global liquidity conditions as the larger drivers. He added:

“Over the next decade, bitcoin’s trajectory will be driven less by miner issuance and more by capital flows.”

Neither Pal nor the correlation figures in his post were accompanied by an underlying dataset or published methodology. The strength of the bitcoin-liquidity relationship has also fluctuated across 2026 as liquidity impulses rose and fell. Keyrock’s own tracking found that bitcoin’s reaction to Treasury issuance lags by roughly eight months, meaning any current correlation reading likely reflects liquidity conditions established months earlier rather than in real time.

For now, that leaves the next data points to watch in the same place Pal has emphasized for months: central bank balance sheets, Treasury financing flows, and the pace at which liquidity actually reaches markets.