With 2025 approaching, Lyn Alden anticipates an improvement in global liquidity, which could positively impact assets like Bitcoin. Supported by economic developments in the U.S. and China, this boost in liquidity may strengthen Bitcoin’s role as “digital gold,” offering attractive opportunities for investors.
In a recent interview, Alden analyzed the primary factors that could influence the global economy in the coming year and shared her insights on Bitcoin. She expects a supportive shift in global liquidity conditions, particularly as the U.S. credit tightening phase may be peaking and China is stepping up economic stimulus. These factors, she notes, contribute positively to overall liquidity. Furthermore, Alden pointed to the U.S. Treasury General Account (TGA) as a potential liquidity source for the banking system, though this will depend on resolving debt ceiling challenges. Should conditions allow, Alden estimates a liquidity increase of up to $800 billion, which could rekindle interest in riskier assets.
Alden foresees an upward trend for Bitcoin in line with improved liquidity conditions, underscoring a strong correlation between Bitcoin and liquidity. “I expect positive liquidity conditions over the next 12 months, which is why I maintain a favorable view of Bitcoin. The two are closely correlated,” she said, noting that Bitcoin price movements often respond sensitively to liquidity shifts.
The Role of Liquidity in Bitcoin’s Price Movements
Alden highlighted that Bitcoin’s strong correlation with global liquidity tends to weaken during periods of overvaluation. She referenced the market-value-to-realized-value (MVRV) ratio as a key indicator, explaining that Bitcoin’s market value, derived from current prices, can signal overvaluation when it significantly exceeds realized value. Currently, however, Alden does not see signs of overvaluation, which she says is a positive indicator for BTC.
According to Alden, the current MVRV ratio supports a bullish outlook, noting that she doesn’t observe excessive valuation signals in BTC right now. She adds, “Given current liquidity conditions, I’m not seeing signs of overvaluation, which makes me optimistic about Bitcoin.”
Economic Fundamentals and Bitcoin’s Role as Digital Gold
Looking ahead to 2025, Alden suggests that Bitcoin’s role may extend beyond speculation to serve as a hedge against inflation. As debt levels and inflation pressures remain high in the U.S. and Europe, investors may increasingly turn to alternative assets. In this context, Bitcoin’s position as “digital gold” could drive demand.
Alden projects that Bitcoin and other risk assets will continue to benefit from liquidity-driven gains, as fluctuations in global liquidity will play a critical role in shaping investment strategies in the year ahead. For the latest insights on market trends, Turkish NY Radio offers in-depth analysis on Bitcoin and its future prospects.
