Macro Expert Lyn Alden Warns A ‘Straight Up’ Bitcoin (BTC) Bull Market Is Unlikely Soon – Here’s Why
Popular macro expert Lyn Alden issues a warning to investors, saying the next Bitcoin (BTC) bull run could be some way off.
In a new strategy session with crypto analyst Benjamin Cowen, Alden says the Federal Reserve’s continued interest rate hikes are likely to keep downward pressure on crypto assets.
“Right now in the hike cycle, they’ve gone into a slowing economy because they see inflation as the primary concern. They think higher interest rates are a key way to get that under control. And then we see a similar dynamic to late 2018 .That’s sort of been the story throughout 2022, going into that weakness.
And so I think as long as you have that dynamic, it’s a challenging place for Bitcoin and similar assets. That doesn’t mean you have to have new lows. It is quite possible that we have seen the lows. But I also don’t think that means you’re going to have another straight-up bull market anytime soon, until you have a shift either in policy or perception of that policy.”
Alden also says that markets assume that the Fed’s hawkish policies will eventually succeed in bringing down inflation, but notes that they may not work. Failure to do so could cause people to lose faith in Fed policy and invest in alternative assets.
“Right now, whenever you see higher inflation or when you see a strong labor market, the market still assumes that the Fed has this under control, that if they get hawkish enough, they can crush this, they can cause this structural period of disinflation if they are just tight enough.
And I think that in the long run it’s not going to be rewarded because inflation is largely fiscally driven, it’s largely out of the Fed’s control. If anything, their interest rate hikes, while they may stop private sector inflation, may worsen public sector inflation.
I think if the market realizes that at some point, if inflation basically continues to break out and they’re already in a recession and we’re still in inflation, that’s when I think you can have a shift and people say, ‘Well, wait a second, maybe more interest rate hikes won’t bring inflation under control, and might want to be in scarcer assets.’
Bitcoin is trading at $20,125 at the time of writing, down 7.4% in the last 24 hours.
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