Macro strategist Lyn Alden says that the worst part of Bitcoin’s bear market is likely over after a shaky first half of 2022 that witnessed BTC lose over 56% of its value.
In a new interview on the Hard Money podcast, Alden says that leading digital asset Bitcoin (BTC) could be on track to recovery as mass liquidations come to a halt.
“Back when Bitcoin was trading around $30,000, there were some signs that maybe the bottom was in. We had some capitulation, of course. This whole thing was another leg lower and so it does seem at the moment at least that the worst of the selling – the rapid selling, the liquidations are behind us.”
However, Alden warns that it’s possible for the top crypto asset by market cap to go another leg down despite currently being in a “deep value zone.”
“There’s still not a lot of bullish catalysts at the moment in terms of the macro landscape, and so I wouldn’t rule out obviously further down movements in the price, but I do think that based on most ways of kind of valuing Bitcoin or looking at Bitcoin’s history, we are in kind of a deep value zone here…
I don’t think investors should ever rule ever out more downward legs as long as the macro situation is this uncertain.”
The macro guru adds that Bitcoin serves as a strong hedge against a particular kind of inflation.
“There’s different types of inflation. There’s monetary inflation and then there’s price inflation that often comes with a lag after that monetary inflation, and what we’ve actually seen for the most part is that Bitcoin is correlated very strongly with money supply growth, global M2 especially as measured in dollars, and so over the past couple years as we got that huge ramp up in in broad money supply around the world, Bitcoin did very well.
As one would expect, we started to get a reduction in the amount of money supply growth, and you started to see the Fed and some other central banks actually try to push back on the price inflation that was materializing. That’s when Bitcoin has and many other assets for that matter have begun to struggle. So I would say that Bitcoin’s been a useful hedge against monetary inflation, but that precedes the actual price inflation.”
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