Global macro investor Lyn Alden has set her sights on Bitcoin (BTC) reaching a whopping $200,000 per coin within the next two years. According to her, achieving a price of $100,000 would be a “disappointing” outcome. In a recent episode of What Bitcoin Did, Alden discussed Bitcoin’s role in the current macroeconomic environment and the challenges faced in predicting its potential price movement.
Alden emphasized that Bitcoin is still closely tied to liquidity, which she believes will gradually increase between 2024 and 2025. While there may be potential turbulence factors in 2024, Alden predicts a likelihood of them materializing. However, she places more conviction in the two-year period rather than just the next year.
Historical Patterns and Macroeconomic Tailwinds
Bitcoin has shown a pattern of major price surges followed by significant corrections every four years since 2013. The source of this pattern remains a subject of debate, but some suggest that it is connected to macroeconomic tailwinds driven by accommodating central bank policies during relevant periods. For example, when the Federal Reserve lowered its benchmark interest rate to 0.25% in March 2020, Bitcoin skyrocketed from $3,500 to $64,000 by April 2021. Current market predictions indicate a potential repetition of this trend in 2024, as the Fed is expected to reduce interest rates once again, setting 2025 up for a bull market across all asset classes, particularly cryptocurrencies.
The Challenge of Price Prediction
While it is evident that Bitcoin’s price correlates with liquidity, determining a specific price prediction based on this correlation is no easy task. Alden suggests that price predictions ranging from $150,000 to $500,000 are all “entirely reasonable,” considering the multitude of variables involved. Factors such as ETF approvals, capital inflows, nation-state shocks, and short-term negative liquidity periods all contribute to the range of potential outcomes. Given this complexity, Alden admits hesitancy in attempting to make an accurate guess.
Nevertheless, Bitcoin’s price can experience fluctuations based on news and market sentiment. For instance, a recent article from Matrixport expressing doubts about the approval of a Bitcoin ETF caused the price to drop from $45,000 to $40,800. However, even with short-term setbacks, there is optimism for Bitcoin’s future once ETFs are approved. Former NYSE President Tom Farley previously predicted that capital would “flood” into Bitcoin after such approval.
While predicting the future price of Bitcoin is challenging, many factors suggest a positive outlook. The correlation between Bitcoin and liquidity, historical patterns, and the potential impact of macroeconomic tailwinds all contribute to the optimism surrounding Bitcoin’s price forecast. As Lyn Alden envisions Bitcoin reaching $200,000 per coin within the next two years, the crypto market eagerly awaits the unfolding of these predictions and the potential for significant returns.