Bitcoin’s next major leg up could hinge on artificial intelligence stocks becoming excessively overvalued in the eyes of investors, according to macroeconomist Lyn Alden. “It could be that the AI stocks eventually just peak, they get so silly big that they can’t get realistically much higher,” Alden told Natalie Brunell on the Coin Stories podcast published to YouTube on Thursday. When an asset’s price rises to a level where further gains are harder to justify, capital often moves into other opportunities with more potential upside.
With Bitcoin (BTC) down almost 46% from its October all-time high of $126,100, Alden suggests it could be a beneficiary of that rotation. The rise of investor interest in AI means that Bitcoin is now “competing for capital” in a way it never has before, Bitcoin developer Mark Carallo said on Thursday. Bitcoin only needs a “marginal amount” of new demand.
However, Alden said Bitcoin wouldn’t need a significant wave of capital to move higher. “It only takes a marginal amount of new demand to come in,” Alden said, adding that long-term holders essentially “put the floor in” as short-term traders rotate out. “The coins rotate from fast money hands to strongly held hands; they are really not going to want to part with it unless it goes up like 5X or more, that kind of buyer,” she said.
Bitcoin is trading at $67,849 at the time of publication, down 24.49% over the past 30 days, according to CoinMarketCap. Alden said she does not expect a quick, near-term surge in Bitcoin’s price. “Bitcoin rarely makes V-shape bottoms outside COVID stimulus-type events,” she said, adding that it “normally it hits a low level then goes sideways for quite a while.” “I think we’re in more of a grind,” Alden said, adding that it may move $10,000 lower or $20,000 lower, and it is still in that “grinding part.”
Leave a Reply