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Macro guru Lyn Alden is revealing her top asset pick for next year amid signs of increasing liquidity.
In a new interview with finance journalist YouTuber David Lin, the analyst says that the asset she is most bullish on in 2025 is Bitcoin (BTC).
Alden believes Bitcoin will have a strong market performance next year because of the flagship digital asset’s tendency to rise when liquidity increases and monetary policy eases.
“We’re kind of coming out of signs of peak credit tightening in the US and so that’s pro-liquidity. And globally, we’re seeing more stimulus out of China. That’s generally pro-liquidity. And like we talked about earlier in the interview, what happens to the TGA (Treasury General Account) in the first half of 2025 is a big yes or no variable for what happens with liquidity. You could have $800 billion of TGA money pushed back in the banking system or not, depending on if the debt ceiling becomes a protracted battle or not.
So I don’t really have a big opinion on magnitude, but I generally have a positive view on liquidity for the next 12 months. And therefore my view on Bitcoin is also positive for the next 12 months. They have a lot of correlation together.”
Lin says there are times when Bitcoin’s correlation with increasing liquidity breaks down, but that usually occurs when its market cap is far above its realized cap. The realized cap metric records the price of each coin when it last moved and aims to gauge how many holders are in profit or at a loss.
“The handful of times where we see Bitcoin break its correlation with liquidity it’s often due to valuation extremes. And there’s a bunch of different ways to measure Bitcoin valuation. You can look at on-chain analytics. Generally, my favorite is market cap to realized cap…
When you get those really big bull runs, sometimes the market cap can get way ahead of realized cap, whereas other times market cap is not that much higher or it’s rare cases when it’s below realized cap, and those tend to be less dangerous from a valuation standpoint, the sentiment and the overbought status is less extreme. So when we look at that I expect liquidity to go up over the next year and I don’t see any signs of extreme Bitcoin valuation, that combination generally leads me to be pretty bullish on Bitcoin.”
Bitcoin is trading for $71,975 at time of writing.