Lyn Alden's recent prediction of "pretty good performance" for Bitcoin in the next year or two offers a comforting narrative. We all want to believe, right, in the future in which we have grown up and Bitcoin is doing what it promised. Let's not get carried away. Her caveat – the lack of a “Black Swan event” – isn’t simply a footnote; it’s the whole tune. The song string it plays is much more intricate than anyone understands.
Geopolitics: The Real Liquidity Driver?
Alden's focus on liquidity cycles is crucial. What causes those cycles in our metaphysically and irrefutably connected, and quite honestly, janky universe? Is it just Fed policy? I don't think so. We need to look East.
Consider the South China Sea. Tensions are simmering. One miscalculation, one accidental skirmish, and all of a sudden, global markets are thrown into a tailspin. That's a Black Swan. What happens to Bitcoin then? Flight to safety? Maybe. Second, it’s a bit of a scramble for real liquidity these days. Everyone is scrambling to the dollar and doing fire sales on everything that is considered “risk-on,” and Bitcoin is no exception.
What if Beijing is forced to make a complete turn in its economic policies, provoking a stampede out of the country’s borders? Where does that capital go? How does that sudden reversal—unreversed as it may be by now—affect the global liquidity picture, and thus, Bitcoin?
These aren't just abstract scenarios. They're real possibilities, lurking beneath the surface of Alden's "pretty good" forecast.
Halving's Fading Magic – Or Is It?
In an insightful piece, Alden argues that Bitcoin’s halving cycles are increasingly losing their explanatory power as the asset reaches maturity. As a result, while mathematically, that makes sense, I believe we’re miscalculating the psychological element.
More than any other event on the Bitcoin calendar, the halving is a built-in scarcity mechanism, a reminder that Bitcoin’s supply is finite. It’s all about the story, the narrative that captures the hearts and minds of the investors. And even if its effect on price fades over time, that narrative is significant. It offers a confidence-building principle, an evidence-based rationale.
Here's the catch: if a major geopolitical crisis hits, will that story be enough? Will investors hold tight to the halving narrative as markets melt down all around them? Or will fear override everything else? It's a question worth pondering.
Singapore's Silent Role: Regulation's Edge?
Singapore – one of the world’s major financial centers – has long been a fascinating, underappreciated piece of the crypto puzzle. Its regulatory policies, though overall more progressive than those of, for example, the United States, are still very much a work in progress.
This is especially true in Asia, and how Singapore decides to regulate Bitcoin and other cryptocurrencies could have a major effect on liquidity. Will it adopt all tokens regulatory guidance, protecting consumers while ensuring innovation and a robust crypto marketplace? Or will it make that proverbial dog wag its tail by tightening the screws, possibly stifling growth?
And what about other Asian nations? Will they follow Singapore's lead? Or will they adopt more restrictive approaches? The answers to these questions will determine the future of Bitcoin, not only in Asia, but all around the world.
Picture, for instance, the opposite situation where Singapore, under pressure from international organizations, adopts draconian KYC/AML rules on bitcoin exchanges. All at once, liquidity—especially in the form of Asian markets—dries up. Would Alden's "pretty good" performance still hold? I doubt it.
This isn't about fear-mongering. It's about being realistic. It’s about recognizing that while Bitcoin is supposed to be separate from the messy world of fiat currencies, it doesn’t operate in a vacuum.
Alden's analysis is valuable, but it's incomplete. It has to be improved with a deeper, more international lens. We need to ask ourselves: what are the unintended consequences of seemingly unrelated global events? So how could these events affect Bitcoin’s liquidity, narrative and price?
Bitcoin can have a "pretty good" future. That future is far from guaranteed. It does depend on things that are mostly beyond our control. That, friends, is the catch that really matters. We cannot afford to rest on our laurels. Instead, we need to double down to cultivate innovation and encourage collaboration across borders.
