Lyn Alden Adjusts Bitcoin Price Forecast Based on Liquidity Factors

Lyn Alden revises her Bitcoin forecast for 2025, pegging it to exceed $85,000, impacted by a tariff announcement. She highlights the importance of liquidity in driving Bitcoin’s performance and suggests that events like Fed interventions could catalyse growth. Alden notes Bitcoin’s unique 24/7 trading limits its stability and draws parallels with historical economic trends that favour Bitcoin over US stocks in turbulent times.

Macroeconomist Lyn Alden has adjusted her Bitcoin price forecast, anticipating it to exceed $85,000 by 2025, although she deems initial projections higher were it not for a tariff announcement by former US President Donald Trump in February. Alden expressed to Natalie Brunell during the Coin Stories episode that she expects Bitcoin to be priced higher by the year’s end, indicating a positive outlook despite the recent economic shifts.

Alden pointed out that a significant liquidity unlock could serve as a pivotal factor for Bitcoin to achieve more ambitious targets, akin to predictions made prior to the tariffs. She suggested that drastic events in the US bond market requiring Federal Reserve interventions, such as yield curve control or quantitative easing, could propel Bitcoin’s value upwards.

Despite her assertion that Bitcoin has a substantial chance of hitting the $100,000 threshold by year-end, she cautioned that market downturns will persist as a challenge for Bitcoin’s value due to its constant trading schedule. Unlike traditional stock markets with set hours, Bitcoin’s 24/7 availability allows investors to react swiftly, which can exacerbate volatility during times of market uncertainty.

At present, Bitcoin trades at approximately $84,868, as reported by CoinMarketCap. Alden also mentioned Bitcoin’s potential to diverge from movements in the Nasdaq 100, especially in situations that negatively impact Nasdaq’s profitability without undermining global liquidity. She referenced historical trends leading up to the 2008 Financial Crisis, suggesting a phase where Bitcoin could thrive despite a stagnant US stock market.

She highlighted that in the period from 2003 to 2007, a weaker US dollar attracted capital into emerging markets and commodities instead of US equities. Alden posits that should a similar five-year economic environment materialise, Bitcoin could perform well during this time, even as traditional markets falter. Her research indicates an 83% correlation between Bitcoin’s price movements and global M2 liquidity over a year, establishing Bitcoin as an indicator of global liquidity trends compared to other asset classes.

In a related note, Bitcoin’s market dynamics reflect its standing as a liquidity gauge, which Alden has discussed in previous publications, emphasising its role relative to other major investment vehicles, including SPX and gold.