Popular macro expert Lyn Alden is issuing a warning to investors, saying that the next Bitcoin (BTC) bull run could be a long way off.
In a new strategy session with crypto analyst Benjamin Cowen, Alden says that the Federal Reserve’s continued interest rate hikes are likely going to keep downward pressure on crypto assets.
“Right now in their hiking cycle, they’ve been hiking into a decelerating economy because they view inflation as the primary concern. They think that higher interest rates are a key way to get that under control. And so we see a similar dynamic to late 2018. That’s kind of been the story of all of 2022, hiking into that weakness.
And so I think as long as you have that dynamic, that is a challenging place for Bitcoin and similar assets. That doesn’t mean you have to have new lows. It’s quite possible that we’ve seen the lows. But I also don’t think it means that you’re going to get another straight up bull market anytime soon, until you have a shift either in policy or perception of that policy.”
Alden also says that the markets are assuming the Fed’s hawkish policies will eventually succeed to bring down inflation but notes it’s possible that they don’t work. If they don’t, it could lead to people losing faith in the Fed’s policies and investing in alternative assets.
“Right now, whenever you see higher inflation or whenever you see a strong labor market, the market is still fully assuming that the Fed has this under control, that if they get hawkish enough, they can crush this, they can cause this structural period of disinflation if they’re just tight enough.
And I think that, in the long run, not going to be rewarded because the inflation is largely fiscal driven, it’s largely outside of the Fed’s control. If anything, their interest rate hikes, even though they can quash some private sector inflation, they can exacerbate public sector inflation.
I think if the market realizes that at some point, if basically inflation keeps breaking out and they’re already in a recession and we’re still in inflation, that’s when I think you could get a shift and people say, ‘Well, wait a second, maybe more rate hikes are not going to get inflation under control, and maybe want to be in scarcer assets.’”
Bitcoin is trading for $20,125 at time of writing, a 7.4% dip during the last 24 hours.
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated Image: Midjourney
Share this article: