Lyn Alden Adjusts Bitcoin Forecast Amid Tariff Concerns and Liquidity Insights

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, but lower than previous expectations due to tariffs.

• A significant liquidity unlock could propel Bitcoin to more optimistic price targets.

• Bitcoin's 24/7 trading contributes to its volatility, especially during traditional market downturns.

• Alden suggests Bitcoin may decouple from the Nasdaq 100 under certain economic conditions.

Tariff Impact on Bitcoin Forecast

In a recent interview on the Coin Stories podcast, Alden expressed that her initial price target for Bitcoin was higher before the tariff announcements made by President Trump in February. She stated, "Before all this tariff kerfuffle, I would have had a higher price target. My guess is that we end up higher at the end of the year than we are now, at least."

The Role of Liquidity

Alden emphasized that a "massive liquidity unlock" could be crucial for Bitcoin to reach its potential. She explained 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's price to rise.

Volatility and Market Dynamics

Alden noted 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 Price Recovery

Despite the challenges posed by broader financial market downturns, Alden remains optimistic about Bitcoin's potential to reclaim the $100,000 price level before the end of the year. She pointed out that Bitcoin could potentially decouple from the Nasdaq 100, especially in scenarios where the Nasdaq faces margin pressures without affecting global liquidity.

Historical Context and Future Outlook

Alden drew parallels between the current economic climate and the years leading up to the 2008 financial crisis. She suggested that if the market experiences a similar five-year period of economic conditions, Bitcoin could thrive even as the U.S. stock market struggles. She referenced the period from 2003 to 2007, where capital flowed into emerging markets and commodities rather than U.S. stocks.

In her research, Alden highlighted that Bitcoin tends to move in correlation with global M2 liquidity 83% of the time over a 12-month period, positioning it as a significant indicator of global liquidity trends.

As of now, Bitcoin is trading at approximately $84,950, reflecting a slight decline of 0.95% over the past month. Alden's insights suggest that while the immediate future may be uncertain, the long-term outlook for Bitcoin remains promising, contingent on broader economic developments and liquidity conditions.