Macro relief for bitcoin may be more muted than many bulls expect, says macro strategist Lyn Alden — and that changes how the next rally might look. Speaking to Coin Stories host Nathalie Brunell, Alden argued the Fed’s next policy move is likelier to be a slow, steady expansion of its balance sheet rather than a “nuclear print” of the kind that historically turbocharged risk assets. That matters because, in her view, bitcoin will have to win investors on fundamentals and narrative appeal rather than rely on a massive liquidity backstop. Why a slow approach? - Alden pushed back on the reflex that every market dip forces dramatic Fed easing. She notes the Fed’s primary concern is the plumbing — liquidity in the Treasury market and interbank lending — not every pullback in stocks. Even sizeable stock declines don’t necessarily prompt emergency printing. - Brunell referenced Fed Chair Jerome Powell’s comments about “slowly” expanding the balance sheet, potentially starting with about $40 billion in short-term Treasury bill purchases — far below the trillions some bitcoin bulls assume. Alden’s response: “the plumbing doesn’t demand a shock-and-awe response right now.” - Historically, QE-sized interventions were tied to an overlevered banking system with low cash buffers and acute private-sector stress. Today banks’ cash ratios remain relatively high, so absent a pandemic-scale disruption, a war escalation, or a “financial war,” the more likely path is incrementalism. What that means for bitcoin - Gradual balance-sheet expansion is “supportive,” Alden said, but not decisive. The era where “micro doesn’t matter at all” only arrives with true emergency stimulus — which she doesn’t see as the near-term base case. - Bitcoin now competes for attention against AI-linked stocks (think Nvidia), precious metals, and other assets. Retail buyers largely stayed on the sidelines this cycle, sovereigns didn’t step in, and the main marginal bids came from corporate treasuries, institutions, and higher-net-worth brokerage buyers aided by ETFs. - Alden described the current cycle as unusually muted in both price and participation. Sentiment, she said, “is worse than 2022.” There was no retail-led “alt season,” and the overall crypto market “kind of ran out of narratives.” She added that bitcoin’s cycle high — which she put at $126,000 — fell short of what she’d consider a satisfying run. On derivatives, ETFs and market structure - While derivatives and ETFs can “inflate” synthetic supply for stretches, Alden argues they aren’t the main reason upside looks capped. The bigger problem is simply that demand hasn’t been strong enough to overwhelm a now-larger and more liquid market. Near-term outlook - Alden expects bottoms to form as “fast money gets out” and coins migrate to “strongly held hands.” That suggests prices are more likely to grind sideways or downward before a sustained climb, rather than delivering a V-shaped recovery. - Upside could arrive if AI trades peak, leaving bitcoin “cheap for a while” in tight hands. In that scenario, “a marginal amount of new demand” — potentially combined with steady buys from companies holding bitcoin on their balance sheets — could restart reflexive price gains. The core takeaway - Don’t bank on policy theatrics to save this cycle. If bitcoin is going to reassert itself, Alden says it’ll be because enough investors still value “self-custodial, undebasable savings” and choose bitcoin over competing assets — not because the Fed suddenly unleashes a QE-scale rescue. Market snapshot - At press time, bitcoin traded at $67,556. Read more AI-generated news on: undefined/news

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