Raoul Pal Predicts Liquidity Boost Post-US Government Shutdown

The recent end of the US government shutdown is expected to influence liquidity in financial markets, with implications for crypto investments:

Raoul Pal predicts increased liquidity as the Treasury General Account (TGA) resumes spending, which could impact the value of the dollar.
The Federal Reserve will end quantitative tightening (QT) on December 1, 2025, shifting to a reinvestment strategy, potentially easing financial conditions.
Pal identifies potential risks like a year-end funding squeeze, suggesting measures like term repo operations and the Standing Repo Facility (SRF) to prevent cash shortages.
Structural changes, such as modifications to the Supplementary Leverage Ratio (SLR), could allow banks to absorb more bonds, lowering rates and improving liquidity.
Improving liquidity and lower real yields are seen as beneficial for digital assets, with regulatory changes like the CLARITY Act also being significant.
The CLARITY Act aims to provide clear regulations for digital assets, dividing oversight between the CFTC and SEC.
Globally, fiscal policies in China and Europe may further enhance liquidity, aligning with US financial strategies.

Overall, these developments suggest an upcoming increase in market liquidity, which could positively affect crypto investments. The total crypto market cap recently stood at $3.24 trillion.

Total crypto market cap