Raoul Pal: Institutions have ended profit-taking as year-end approaches

Real Vision CEO Raoul Pal believes that the recent volatility in bitcoin prices is due to institutional selling of bitcoin to help prop up its year-end profits.

The perennial bitcoin bull told Vlad in a Dec. 27 interview with The Stakeborg Talks that he believes the current market is unbalanced due to institutional influence. They have been selling to lock in profits, Pal said. It's a way for institutions to say "I believe in the benefits."

Given that most of December's sell-off came from wallets that hoarded bitcoin around the summer, according to Glassnode, and that institutional crypto assets under management (AUM) spiked in May and October, according to Coinshares, the timing of the sell-off does indeed Point to institutions that are partially selling.

"The question now is, 'Are they over?" Pal asked.

"It looks like they're done because the market has been volatile for the past week and the last week is historically the one where everyone sorts out their books."

While he predicts further sell-offs in Asia are likely, Pal expects 2022 to be a strong start for the crypto market as institutional capital is redeployed.

Pal believes that by 2022, institutional investors will become increasingly bullish on cryptocurrencies as they begin to better understand the technology's increasing adoption and "how much that means an increase in market capitalization" by the end of the decade.

Noelle Acheson of Genesis Trading shares Pal's institutional bullish view on cryptocurrencies heading into 2022. Today, on CNBC's Squawk Box, she discusses institutional trends for 2021 and points to some potential bright spots for 2022.

“Institutional growth over the past 12 months has been phenomenal, and we see strong indications that this growth will accelerate over the next year, both through direct investments and investments in crypto market infrastructure companies themselves.”

Bitcoin is currently down around 3.5% over the past 24 hours, trading at $47,954 as of this writing.

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