Macroeconomist Lyn Alden Lowers Bitcoin Forecast Due to Tariff Announcements

Macroeconomist Lyn Alden has adjusted her Bitcoin forecast, citing the recent tariff announcements by US President Donald Trump as the primary reason for the change. Initially, Alden had a more optimistic price target for Bitcoin, but the tariff developments have led her to lower her expectations. Despite this adjustment, Alden remains bullish on Bitcoin's long-term prospects, predicting that the cryptocurrency will finish 2025 higher than its current price of around $85,000. She believes that a "massive liquidity unlock" could serve as a catalyst for Bitcoin to reach more ambitious targets, similar to those before the tariffs were introduced. Such a scenario could involve the US bond market experiencing significant stress, prompting the Federal Reserve to implement measures like yield curve control or quantitative easing.

Alden's analysis highlights the unique challenges and opportunities presented by Bitcoin's 24/7 trading environment. Unlike traditional stock markets, Bitcoin's continuous trading can lead to increased volatility, especially during periods of market uncertainty. This round-the-clock trading allows investors to react to global events more quickly, which can contribute to Bitcoin's volatile pricing. Alden acknowledges that market "down days" will continue to pose challenges for the asset, but she remains optimistic about its potential to disconnect from traditional financial markets, such as the Nasdaq 100, in certain economic conditions.

Alden draws parallels between the current economic environment and the period leading up to the 2008 Global Financial Crisis. She notes that during the 2003–2007 period, a weaker US dollar cycle led to capital flows into emerging markets, commodities, gold, and other assets, rather than US stocks. Alden suggests that a similar economic environment could be favorable for Bitcoin, allowing it to perform well even if the US stock market does not. This perspective is supported by her research, which indicates that Bitcoin moves in the direction of global M2 83% of the time in a given 12-month period. This correlation highlights Bitcoin's role as a global liquidity barometer, making it a potential safe haven asset during times of economic uncertainty.