Crypto Cycle ‘Spookily Similar’ to 2017

The current crypto market is mirroring the pattern seen in 2017 when Bitcoin posted a steady uptrend throughout the year before skyrocketing in December, says crypto research platform Real Vision CEO Raoul Pal.

“It’s spookily similar to 2017,” Pal said in a video on Thursday. Pal said he is starting to forecast a longer crypto cycle this time around given that the business cycle score — a macroeconomic model he uses to track where the global economy is in the broader cycle — is “still below 50” and it generally “takes a while to climb up.”

Macro data the catalyst behind extended crypto cycle 

Bitcoin (BTC) started 2017 trading around $1,044 before reaching $2,187 by May 31 and closing the year at $14,156, an approximate 1,255% increase from its price at the beginning of the year, according to CoinMarketCap data.

However, Pal speculated that the weakening US dollar could indicate that the current crypto cycle is still far from reaching its peak.

“With the dollar breaking down even today, it’s starting to suggest this may go into Q2 2026,” he said. Since Jan. 1, the US Dollar Index (DXY) is down 8.99%, sitting at 98.77 at the time of publication, according to TradingView data. Bitcoin and the DXY are inversely correlated.

When the dollar weakens, BTC becomes more attractive not just as a speculative investment but as an alternative currency.

Pal said macroeconomic data has likely been a primary catalyst in pushing the crypto cycle back further.

“It’s like the whole cycle got shifted cause rates didn’t get adjusted; the dollar was sideways for a period of time,” he said.

He also said that current market conditions may resemble 2020 more than 2021, suggesting the market could be in an earlier growth phase than many assume.

“The mandate” of the Middle East is AI and blockchain

Bitcoin began 2020 at $7,174 but dropped 27% to $5,227 by March. It then rebounded 129% to reach $11,990 in August, ultimately ending the year at $28,993 — a 304% increase from its price at the beginning of the year.

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Pal said for the market to keep expanding it needs to keep attracting the “bigger players.” He recounted his recent trip to the Middle East, where he met with Sovereign Wealth Funds and said that most had a bullish outlook on crypto:

“The mandate across the entire region, from Saudi to Abu Dhabi to Dubai to Bahrain to Qatar, is AI and blockchain.”

“Not just using Bitcoin as a reserve asset but also building the entire government infrastructure on blockchain,” he added.

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