Bitcoin may have already hit its low for this market cycle, macro investor Lyn Alden said on the Milk Road Crypto podcast on Oct. 26, as the token struggled to hold the low $80,000s. Alden, f
Bitcoin may have already hit its low for this market cycle, macro investor Lyn Alden said on the Milk Road Crypto podcast on Oct. 26, as the token struggled to hold the low $80,000s.
Alden, founder of Lyn Alden Investment Strategy, said her base case is that the bottom is in. She said the view rests on probabilities, not certainty.
She cautioned that a bottom does not mean an immediate rally.
Alden said bear markets tend to end when almost everyone who wanted to sell has done so.
She said short-term traders have mostly left the market and leveraged positions have been wiped out several times. The investors who remain are mostly long-term holders, she said.
In her view, most known structural risks are already reflected in prices.
Alden said she is not arguing that a bull market has started. Selling pressure may be lighter, but the market still needs a new catalyst to bring buyers back, she said.
She expects prices to stay choppy for some time. She described the risk and reward for multiyear investors as "really attractive" at current levels.
Alden said the one risk not priced in is technical. A year ago, the main worry was quantum computers breaking the math that secures crypto, she said. The concern has since shifted to artificial intelligence doing so without quantum hardware.
She said a successful attack that seriously damaged the Bitcoin network could force even committed holders to sell. She called it a catastrophic tail risk and said it is hard to put odds on because the cryptography is complex.
On quantum computing, Alden said she takes a longer view because major hardware breakthroughs often take longer than expected. She said institutional investors still raise it, and it affects sentiment.
She said complex projects face the most danger. Blockchains are public, complexity adds weak points, and most crypto transactions cannot be reversed, she said.
That is most relevant for decentralized finance users chasing yield, Alden said. In her view, many yields do not compensate for the yearly risk of a hack.
She remains cautious on most of the crypto market outside bitcoin, stablecoins and certain tokenized assets. She said Bitcoin's simpler design leaves it less exposed, though no system is risk-free.
Alden said parts of the AI trade look tired, though she does not see a sector-wide peak. She said Bitcoin can benefit if AI simply stops being the most attractive trade, and that this shift has not yet shown up in clear inflows.
She called oil a short-term concern. Higher fuel costs can keep inflation elevated and push investors to sell assets for cash, she said. She named refinery damage, transport bottlenecks and the end of US Strategic Petroleum Reserve drawdowns as factors to watch.
Over the longer term, she expects large US deficits to continue over the next two years. That could raise interest in scarce assets, she said.
Factor
Alden's view
Possible effect on BTC
Seller exhaustion
Traders gone, leverage wiped out
Supports a bottom, needs new buyers
AI hacking
Not priced in, hard to size
Catastrophic tail risk
Complex DeFi
Hacks can wipe out deposits
Yields may not justify the risk
AI stocks
Parts look tired
Capital may rotate if AI stops leading
Oil and energy
Keeps inflation elevated
Short-term pressure
US deficits
Likely to stay large for two years
Longer-term case for scarce assets
Alden said selling pressure looks close to exhausted, but the next move higher needs a trigger. She urged investors to size positions with care for risks they cannot measure.
Bitcoin was struggling to hold the low $80,000s at the time of her comments.
This article is for information only and is not financial advice. Crypto assets are volatile and carry a high risk of loss. Views shared here belong to the people quoted and do not guarantee any result. Do your own research and speak with a licensed financial adviser before you invest.
