Macroeconomist Lyn Alden suggests that Bitcoin’s next major price surge may depend on a rotation of capital from overvalued artificial intelligence stocks. In a recent podcast interview, Alden stated that if AI equities reach unsustainable valuations, investors could seek alternative opportunities like Bitcoin. This potential shift comes as Bitcoin trades nearly 46% below its all-time high of $126,100, recorded in October.
Macroeconomist Lyn Alden says Bitcoin‘s next major leg up could depend on artificial intelligence stocks becoming excessively overvalued. “It could be that the AI stocks eventually just peak, they get so silly big that they can’t get realistically much higher,” Alden stated on the Coin Stories podcast.
When an asset’s price rises to an unjustifiable level, capital often moves into other opportunities. With Bitcoin down almost 46% from its October high, it could benefit from that rotation.
Some analysts question whether the largest AI stocks will maintain momentum. Albion Financial Group chief investment officer Jason Ware recently asked if Nvidia‘s growth can continue supporting its stock price.
“We all know they are the most concentrated, obvious winner in the AI build out. Can that growth continue in a way that supports the stock moving higher?” Ware said. He noted that Nvidia is “probably the most important company and most important stock in America in the market.”
The rise of AI means Bitcoin is now competing for capital in a new way. However, Alden said Bitcoin wouldn’t need a massive wave of new demand to move higher.
“It only takes a marginal amount of new demand to come in,” Alden explained. She added that long-term holders essentially set a price floor as short-term traders exit.
“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, down 24.49% over the past month.
Alden does not expect a quick, near-term price surge for Bitcoin. “Bitcoin rarely makes V-shape bottoms outside COVID stimulus-type events,” she said, noting it typically consolidates after hitting a low.
