Raoul Pal predicts 2026 as the decisive point for cryptocurrencies! Five-year cycle theory targets a market cap of 100 trillion

Real Vision founder Raoul Pal shares the 2026 investment framework: extending the crypto cycle to five years, predicting a liquidity explosion in 2026 with $10 trillion in debt refinancing. The current market of $3.5 trillion is only 3% towards the target of $100 trillion. He proposes a minimal regret portfolio, recommending focus on Layer 1 assets, avoiding borrowed beliefs, and believing that the market has bottomed in October.

Five-year cycle replaces four-year cycle: 2026 is the real breakout point

Raoul Pal’s most important update is extending the crypto market cycle from four to five years. He states: “I originally thought the crypto cycle was four years, but now I’ve extended it to five.” This adjustment is not arbitrary but based on in-depth research into global debt structures. Since the 2008 financial crisis, countries have lowered interest rates to zero and set debt maturities between 3 and 5 years, meaning every four years there is a wave of debt maturities needing refinancing.

However, Raoul Pal found that in 2021 and 2022, many countries extended debt maturities beyond five years. This means that the liquidity surge expected in the fourth year has been delayed to the fifth year, which is 2026. He predicts: “The real liquidity demand will occur in 2026 because then $10 trillion in debt will need refinancing.” This macro analysis provides a solid foundation for Raoul Pal’s long-term bullish thesis.

Liquidity is a core concept Raoul Pal repeatedly emphasizes: “Liquidity is the most dominant macro factor right now.” He explains that liquidity is not only linked to quantitative easing but also involves the Federal Reserve’s net liquidity, which includes the Treasury General Account (TGA) and reverse repurchase agreements (RRP). Current liquidity growth rates have been low, but 2026 will see a turning point.

Raoul Pal believes the market has bottomed: “I think the market has bottomed. In October, we experienced a liquidity crisis when the U.S. government drained a large amount of liquidity through the Treasury’s general account.” He points out that since November, a “bottom-fishing zone” has gradually formed, and now is a critical time to position for the 2026 explosion.

Minimal regret portfolio: avoid 90% loss traps

Raoul Pal’s concept of the “minimal regret portfolio” directly addresses retail investors’ pain points. He explains: “The ‘minimal regret portfolio’ is designed so that when you review your investments, you won’t regret impulsive actions taken earlier, avoiding foolish investment decisions.” The core of this framework is risk management rather than maximizing returns.

He recommends focusing on mature assets like Layer 1 blockchains: “Investing in Layer 1 is a relatively simple choice. Compared to other tokens, they are larger in scale and have higher adoption. In a market cycle, these assets won’t go to zero.” This conservative strategy is especially important in the current market environment, where thousands of tokens exist, making it increasingly difficult to find truly valuable ones.

Raoul Pal criticizes the “borrowed belief” investment approach: “Many people invest by ‘borrowing belief,’ for example, ‘X influencer said this project is good, so I bought it.’ But this kind of reflexivity often leads to wrong decisions.” He emphasizes: “Most people never do their own research. They just say: ‘Tell me this project will succeed.’ But how much do they really understand about it?”

Raoul Pal’s three principles for the minimal regret portfolio

Focus on mature assets: Prioritize Layer 1 blockchains like Bitcoin, Ethereum, Solana; avoid high-risk small-cap coins

Self-research verification: Use ChatGPT to query on-chain indicators, user growth data; don’t rely solely on others’ opinions

Long-term holding logic: Set a five-year time frame, ignore short-term volatility, focus on network effects and compound growth

He even mentions using ChatGPT for research: “You can ask ChatGPT ‘How are the on-chain indicators of this blockchain? What about user growth data?’ These insights can be found in seconds.” This democratized research tool enables retail investors to perform professional-level analysis.

Only 3% completed: the epic journey from $3.5 trillion to $100 trillion

Raoul Pal is extremely optimistic about the long-term prospects of the crypto market: “Currently, crypto is a $3.5 trillion asset class, and we might reach a $100 trillion market cap within 10 years, meaning we’ve only covered about 3% of the journey.” This argument is based on network effects and Metcalfe’s Law, not traditional cash flow valuation models.

He emphasizes the power of network effects surpasses traditional analysis: “Network models are exponential because a more valuable network attracts more users, which in turn creates more value, forming a continuously rising cycle.” Raoul Pal calculates that each new Ethereum user adds about $313,000 in value, while on Solana, this figure is around $65,000.

Regarding Bitcoin’s long-term outlook, Raoul Pal cites Bitwise Chief Investment Officer Matt Hougan: “Bitcoin will become a better store of value than gold.” Currently, gold’s market cap is about $25 to $30 trillion, while Bitcoin is only $2 trillion. If Bitcoin catches up with gold, it implies over 10x growth, with a price potentially reaching $1 million.

Zcash and the last chance for privacy coins

Raoul Pal’s views on privacy coins have garnered attention. He mentions that Silicon Valley legends Naval and Balaji both see promise in Zcash: “Naval believes Zcash is the last true privacy coin and the final opportunity in crypto to deliver 1,000x returns. Balaji’s view is that after Bitcoin, only two protocols truly broke the traditional mold—Ethereum, with its programmability, and Zcash, with its focus on privacy.”

However, Raoul Pal himself does not buy immediately: “I might choose to buy during the next down cycle. I expect this cycle might occur in 2027, and by then Zcash could be one of my investment targets.” This cautious attitude shows that even when optimistic about an asset, timing remains critical.