Bitcoin is struggling to maintain levels in the low $80,000s. Macro investor Lyn Alden, founder of Lyn Alden Investment Strategy, suggests that the worst of this market cycle may already be behind us. Speaking on the Milk Road podcast, Alden described her base case as Bitcoin's bottom "is in," while noting that market outcomes remain probabilistic rather than certain.
Signs the Selling Pressure May Be Exhausted
Alden's thesis rests on the mechanics of how bear markets typically end: prices bottom when most sellers have already exited. Several factors support this view in Bitcoin's case:
- Short-term traders have largely left the market
- Leveraged positions have been liquidated multiple times
- Remaining investors are predominantly long-term holders with stronger conviction
- Most familiar structural risks are already reflected in the price
According to Alden, money that would sell for almost any reason has likely already departed, leaving primarily committed participants.
A Bottom Is Not a Bull Market
Alden emphasized that identifying a bottom does not signal an immediate rally. While selling pressure may be lighter now, Bitcoin still needs a new catalyst to attract fresh buying interest. She expects prices to remain choppy in the near term.
"I'm not necessarily arguing that we're in a bull market," Alden said. Nonetheless, she characterized Bitcoin's risk-reward profile as "really attractive" for investors with multi-year time horizons.
An Emerging Cryptographic Risk
Alden identified one significant risk she believes markets have not yet priced in: the potential use of artificial intelligence to break the mathematical foundations securing digital assets. A year ago, the primary concern was quantum computing; the focus has now shifted to AI-driven cryptographic attacks that would not require quantum computers.
Such an attack could cause serious damage to the Bitcoin network and force even committed holders to sell. Alden characterized this as a catastrophic tail risk that is difficult to quantify because of the complexity involved in the underlying cryptography.
Why Complex Projects Face Greater Exposure
Alden outlined three reasons why AI-driven attacks pose the biggest threat to more complicated blockchain projects:
- Blockchains are public systems that anyone can analyze for vulnerabilities
- Greater complexity creates more potential points of weakness
- Most cryptocurrency transactions cannot be reversed once completed
This concern weighs most heavily on DeFi users pursuing yield. Alden suggested that many yield opportunities do not adequately compensate for the annual probability of a hack that could partially or completely erase a deposit.
Alden remains cautious about most of the crypto market beyond Bitcoin, stablecoins, and certain tokenized assets. Bitcoin's relatively simple design offers less exposure to these risks, though no system is entirely risk-free.
