Bitcoin: “Don’t Expect a Quick Bull Run” – Lyn Alden
Lyn Alden, a respected macro expert, has issued a warning to investors about the next Bitcoin (BTC) bull run, suggesting it could be a long way off.
Alden cited the Federal Reserve’s interest rate hikes as a key reason for the downward pressure on crypto assets.
She noted that the Fed’s current hiking cycle is happening amid a decelerating economy and to tackle inflation. This dynamic is similar to what was observed in late 2018 and has been the story of 2022 so far.
According to Alden, as long as the Fed continues its current policy, Bitcoin and other similar assets could face challenges. However, she also clarified that this doesn’t necessarily mean new lows for crypto assets. While it’s possible that the lows have already been seen, she doesn’t believe another straight-up bull market is likely until there is a shift in policy or perception.
Alden further commented on how the markets are assuming that the Fed’s hawkish policies will eventually bring down inflation. However, she also noted that they may not work, which could lead to people losing faith in the Fed’s policies and turning to alternative assets.
She believes inflation is largely driven by fiscal policy, which is largely outside the Fed’s control. In fact, she argues that the Fed’s interest rate hikes could even exacerbate public sector inflation.
In the long run, Alden believes that investors won’t be rewarded for assuming the Fed has everything under control. If inflation continues to break out, even during a recession, and people start to doubt the efficacy of rate hikes, then scarce assets may become more attractive to investors.
As of the time of writing, Bitcoin is trading around $20,400.