Bitcoin is struggling to hold the low $80,000s. Macro investor Lyn Alden thinks the worst may already be over. Speaking on the Milk Road podcast, Alden said her base case is that Bitcoin’s bottom for this cycle “is in.” She added that the outlook is a matter of probabilities, not certainty. Alden is the founder of Lyn Alden Investment Strategy.

The argument rests on how bear markets usually end: prices tend to bottom when everyone who wanted to sell has already sold. According to Alden:

• Short-term traders have mostly left the market
• Leveraged positions have been wiped out several times
• The investors who remain are mostly strong, long-term holders

Most of the familiar structural risks are already reflected in the price, in Alden’s view. Money that would sell for almost any reason has likely already left.

A bottom does not mean Bitcoin will rally straight away. Selling pressure may be lighter now, but the market still needs a new catalyst to bring buyers back, and Alden expects prices to stay choppy for some time.

“I’m not necessarily arguing that we’re in a bull market,” Alden said. Even so, Alden described Bitcoin’s risk-reward as “really attractive” at current levels for anyone investing over several years.

The one risk Alden sees as not priced in is technical. A year ago, the main worry was quantum computing breaking Bitcoin’s cryptography. The concern has now shifted to AI being used to break the math that secures digital assets, without needing quantum computers at all.

If an attack seriously damaged the Bitcoin network, even committed holders could be forced to sell. Alden called that a catastrophic tail risk that is hard to put a probability on, because the cryptography involved is so complex.

Why Complex Crypto Projects Face More Danger

According to Alden, AI-driven attacks pose the biggest threat to the most complicated projects, for three reasons:

• Blockchains are public systems that anyone can probe for weaknesses
• The more complex a system is, the more points of weakness it may have
• Most crypto transactions cannot be reversed once they are made

This matters most for DeFi users chasing yield. Any return has to be weighed against the yearly chance of a hack that could wipe out part or all of a deposit, and in Alden’s view many of those yields do not justify the risk.

Alden remains careful about most of the crypto market outside Bitcoin, stablecoins and certain tokenized assets. Bitcoin’s relatively simple design makes it less exposed, though no system is completely risk-free.

The outlook has two sides. Selling pressure appears close to exhausted, so the bottom may be in. But the next leg higher still needs a trigger, and a new kind of technology risk has appeared that markets may not yet fully understand.

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