During a two-hour webcast titled 'Drinks With Raoul' on May 22, amidst Bitcoin breaking to a new high of $111,800, Raoul Pal — former hedge fund strategist and co-founder of Real Vision — declared: 'The Banana Zone has begun. Bitcoin has reached a new high. The next theme will be alternative assets. Make sure you hold enough Bitcoin.'

What is the 'Banana Zone'?

According to Pal, the 'Banana Zone' is a phase where abundant liquidity pushes investors higher on the risk curve. He emphasizes that the policies of the bond market are creating this liquidity — not inflation.

He explained that the U.S. 10-year bond yield exceeding 4.4% is not due to rising inflation, but rather a lack of collateral. While inflation continues to decrease, the liquidity in the bond market is weak. And when interest rates become too high, the government always chooses to print more money to save the market.

This eliminates significant negative risk (left-tail risk) and drives the prices of restricted assets to rise sharply — just like in 2017. Bitcoin, gold, and stocks have 'gone to the moon.'

Strength from a Weak Dollar

Pal also took time to compare USD charts:

In Trump's first term, the dollar weakened significantly. And currently, a similar situation is occurring — but faster. A weak dollar is a catalyst for the global economy. Historically, after major declines of the USD, Bitcoin has increased by 119%, 175%, and even 592% within 12 months. That is the denominator effect.

Is Altseason Coming Soon?

As Bitcoin is in a 'rest' phase after a strong surge, Raoul Pal believes that Ethereum and high-beta Layer-1s like Solana and Sui will be the next beneficiaries. He cites data from the ISM manufacturing index (currently below 50) and the financial conditions index he tracks, which is 'soaring' and often leads ISM by about 9 months:

Altseason (altcoin season) will begin when ISM exceeds 50. Bitcoin is gradually losing its edge, as the ETH/BTC ratio is forming a bottom.

He also pointed out the technical charts of Solana and Sui forming a classic cup-and-handle pattern, and joked about Dogecoin:

The funniest scenario would be Dogecoin surpassing Bitcoin since its inception and becoming the hardest currency in the world. That would anger many people, but the charts indicate that it could happen.

Next Target: $140,000?

Despite being optimistic, Pal also warns that the market needs to closely watch the global liquidity model (global-M2) he has built:

This model indicates that we should surpass $140,000 before July.

Conclusion

Raoul Pal believes that Bitcoin is entering a historically significant bull phase. But more importantly, he recommends that investors keep an eye on alternative assets, especially as liquidity waves are flooding in. With macro analysis, cycle data, and consensus techniques, the 'Banana Zone' may just be beginning — and if so, this growth train could be very long.