Global liquidity expansion supports risk assets
The bull case presented by Raoul Pal suggests that rising global and domestic M2 liquidity is highly correlated with Nasdaq and crypto upside.
The argument
Pal argued that total global liquidity, US liquidity, and China liquidity are all rising alongside the ISM index. He noted that the Nasdaq has a 97% historical correlation with total global liquidity, suggesting a strong tailwind for risk assets.
The thesis, stress-tested
✓ What validates it
- ✓Continued expansion of global M2 money supply in Q2 2026
- ✓Nasdaq continuing to print new all-time highs in tandem with liquidity metrics
▸ Risks discussed
- ▸Discrepancies with other liquidity quants who argue global liquidity has already peaked and is falling
- ▸Rising liquidity in equities does not guarantee a direct flow into crypto assets
Hear it yourself
"But Raoul Pal joins the bull camp, has been in the bull camp, and he said that, the, the Nasdaq has a 97% correlation with the total global liquidity. So if total liquidity is going to all time highs, then the the Nasdaq is obviously following."
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