Macroeconomics expert and author Lyn Alden says that traditional financial institutions are starting to believe that Bitcoin (BTC) is not in a classic bubble.
In a new interview with Peter McCormack on the What Bitcoin Did podcast, Alden says that Bitcoin’s price over the past 15 years indicates an overall upward market trend that is likely to continue.
“You see this recurring cycle, and it’s done this like three times. Three times it’s had a higher high after a 75% drawdown or more, sometimes like over 90%. And there’s a handful of stocks that have done that, but I haven’t found any stocks that have done it more than three times and so if Bitcoin has another higher high it would be like the fourth time it’s done this.
But what we have to keep in mind is that, again, most people have not seen that chart. And instead what most people see is only the ones that happened while Bitcoin is big enough for them to be aware of it. So for example, they saw the 2017 spike and then the crash, and then they saw the 2021 spike and crash, the higher high, higher low. So they’ve seen two. So they think, Okay, there was a bubble, and then there was a stimulus bubble, and then it’s dead. That’s how a lot of people saw it.”
Alden says that once institutions pay attention to BTC’s long history of printing higher highs and higher lows, they start to understand Bitcoin is not functioning as a typical market bubble, but as an asset in a long-term uptrend.
“Whereas those of us more in the space, are saying, No, no, this is still going strong under the surface. When they see a third higher high and maybe a third lower low, it becomes impossible to ignore. Because it’s not just how many times Bitcoin’s done it, it’s how many times they’ve experienced it happen. And therefore it’s fully on their radar whether or not they’ve seen that logarithmic chart or not.
And so I think that’s where Bitcoin becomes more and more normalized among the institutions and it becomes less crazy to talk about it because it is this asset that is not displaying characteristics of a traditional bubble. People keep calling it tulips [a 17th-century market bubble related to the price of the flower bulb], but if you look at the tulip chart, it’s like this three-year chart of just this insane spike and a crash. It didn’t come back higher and higher multiple times over 15-plus years. And so once people see that happen more and more it becomes normalized.”
Bitcoin is trading for $42,742 at time of writing, up slightly in the last 24 hours.
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