AI Just Unlocked Crypto’s Infinity Glitch! | Raoul Pal

Raoul Pal argues that AI agents and robots could expand crypto’s potential user base far beyond people, creating what he calls an effectively “infinite” opportunity. Agents acting on people’s behalf will need systems to coordinate payments, identity, permissions, and provenance. Pal forecasts billions of agents doing economic activity within five years, although he says activity is still small: he cites roughly 150,000 in connection with X402 payments and stresses that figure is uncertain. Much of this economy may be invisible to consumers, running through APIs and MCPs rather than websites.

Autonomous agents will need to pay for electricity, compute, and data, and Pal says conventional payment systems built for human transactions may be too slow for instantaneous microtransactions. He sees agents eventually building businesses and raising capital through crypto markets, with data potentially becoming the largest marketplace. People can use AI without blockchains, he says, but agents acting on people’s behalf need blockchain systems. This activity could expand stablecoin use and distribute dollars globally through blockchain rails.

Pal says stablecoins predate the AI boom rather than having been designed for it, but sees them as a natural fit for the agent economy. He says Scott Bessent has recognized stablecoins as a way to wrap dollar-denominated bonds for individual buyers around the world, and cites a $3 trillion stablecoin market as a scale Bessent has discussed. Tokenized equities and bonds could also widen access to US capital markets. Pal argues that AI and dollar-backed stablecoins could reinforce the dollar-led system—he says 87% of world trade is conducted in US dollars—and give the dollar an effectively “infinite” runway, while warning that governments could mishandle the opportunity.

Pal expects AI and robotics to sharply raise productivity and change how population and productivity drive economic growth. He predicts roughly 20% GDP growth in the early 2030s, and says a sufficiently robotized workforce could eventually support 20–30% growth, but cautions that the transition is moving too quickly for reliable long-range forecasts. He says the rate of intelligence per unit of energy is doubling every 4.2 months, while chips, fabrication capacity, buildings, and electricity infrastructure are insufficient to meet AI demand. As productivity indicators, he cites Meta’s revenue per employee doubling and Nvidia’s rising from $2 million to $10 million; he also predicts Amazon could have more robots than human workers by next year. Pal expects an “economic singularity” around 2030, though adoption remains uneven.

On crypto markets, Pal says he viewed the downturn as a mid-cycle fall like 2019–2020, not a full cycle. He attributes Bitcoin’s February-to-August sideways stretch partly to capital concentrating in AI rather than crypto, alongside constrained liquidity from factors including the Iran war, a stronger dollar, rising rates, and government shutdowns. He expects a broader crypto rise to require more liquidity. Pal estimates US trend GDP growth at about 2%, with government and private-sector debt each above 100% of GDP. Debt-to-GDP can fall when GDP growth outpaces debt growth, he says, pointing to post-World War II yield caps and a productivity boom as factors that helped reduce government debt from above 100% to about 40%. He describes the current debt cycle as 5.8 years, with its usual liquidity ramp-up running into Q1 or Q2 2027, but says bond issuance and the capex supercycle could prolong funding needs. He expects the next larger interest-rate move to be down, while allowing for another 25-basis-point increase, and is watching for the dollar to turn lower as a sign of improving liquidity.

Pal’s crypto approach favors major, useful, fast layer-one networks where activity can accumulate, naming Ethereum, Solana, and Sui; he says cheaper, more efficient networks tend to see greater use if they adapt to new technology. He holds those three assets and some Zcash, avoids going deep into altcoins, and keeps his digital-art portfolio in ETH. He says he added to Ethereum, Solana, and Sui during an early-year selloff and again in June, and bought Zcash. He describes Zcash as a private version of Bitcoin and sees a possible investment case if it reached 10% of Bitcoin’s market size; he also distinguishes government-resistant privacy from government-sanctioned privacy, noting that privacy is being built into smart-contract networks. An unnamed speaker expects the next cycle to be driven by altcoins rather than Bitcoin; Pal says he owns little Bitcoin but does not disagree. He favors keeping exposure simple through technology stocks or the Nasdaq and crypto rather than frequent speculative trades, with allocation determined by risk tolerance and goals.