Macroeconomist Lyn Alden has revised her Bitcoin price forecast, anticipating a year-end value higher than its current price of approximately $85,000. However, she attributes this adjustment to recent tariff announcements by the U.S. government, which she believes have impacted market sentiment and liquidity.
Key Takeaways
- Lyn Alden predicts Bitcoin will finish 2025 higher than $85,000.
- Recent U.S. tariffs have influenced her price target downward.
- A significant liquidity event could propel Bitcoin to higher levels.
- Bitcoin’s 24/7 trading contributes to its volatility, especially during market downturns.
- Alden sees potential for Bitcoin to decouple from traditional markets under certain conditions.
Tariff Impact on Bitcoin Forecast
In a recent interview, Alden expressed that her original price target for Bitcoin was more optimistic before the U.S. tariffs were announced. She stated, "Before all this tariff kerfuffle, I would have had a higher price target." Despite the downward adjustment, she remains hopeful that Bitcoin will end the year above its current trading price.
The Role of Liquidity
Alden emphasized that a "massive liquidity unlock" could serve as a catalyst for Bitcoin’s price increase. She noted that if the U.S. bond market were to experience significant disruptions, the Federal Reserve might need to intervene with measures such as yield curve control or extensive quantitative easing. Such actions could create favorable conditions for Bitcoin.
Volatility and Market Dynamics
Alden pointed out that Bitcoin’s continuous trading can lead to increased volatility, particularly when traditional financial markets are experiencing turmoil. She explained, "Because it trades 24/7, if people are worried about how things are going to open on Monday, some pools of capital can sell their Bitcoin on a Sunday and prepare."
This unique trading structure means that Bitcoin can react swiftly to market sentiments, often leading to price fluctuations that are not seen in traditional stock markets, which operate on set hours.
Potential for Decoupling from Traditional Markets
Interestingly, Alden believes that Bitcoin has the potential to decouple from the Nasdaq 100, especially in scenarios where traditional markets face challenges without affecting global liquidity. She referenced the period leading up to the 2008 financial crisis as a potential model for Bitcoin’s future performance. During that time, capital flowed into alternative assets like commodities and gold, while U.S. stocks struggled.
Alden noted, "If we encounter a five-year period like that again, that could be a period where Bitcoin does pretty well, even as the U.S. stock market doesn’t do particularly well."
Conclusion
As of now, Bitcoin is trading at approximately $84,950, reflecting a slight decline of 0.95% over the past month. While Alden acknowledges the challenges posed by broader financial market downturns, she remains optimistic about Bitcoin’s potential to reclaim the $100,000 price level before the year concludes. The interplay of tariffs, liquidity, and market dynamics will be crucial in shaping Bitcoin’s trajectory in the coming months.
