Macro expert Lyn Alden says she is “very optimistic” about Bitcoin (BTC) longer term, amid the US government’s rising interest payments on its more than $35 trillion national debt.
Alden notes a recent newsletter shows that BTC is highly correlated with global liquidity, a trend that the analyst expects to continue.
“My five-year outlook on this asset is very bullish, but volatility in position sizes for a given portfolio and associated requirements must be taken into account.”
According to Alden, one of the reasons she believes Bitcoin will move higher in the long term is the expectation that the US government will face “structurally high deficits” in the coming years.
Based on data from the Congressional Budget Office (CBO), Alden says the U.S. national debt could rise to $55 trillion in just a decade.
“So that’s the conservative baseline, which calls for net new government debt additions of more than $20 trillion over the next decade.”
Alden says growing interest payments on rising government debt are boosting the US economy, adding to global liquidity and boding well for BTC.
“Interest payments flowed from the federal government to the private sector, which stimulated some parts of the economy as it was part of the growing deficit. Indeed, the economy held up better than most expected, and inflation proved more stubborn to return to the 2% target than most expected.”
Treasury Department data show that the U.S. government is pay $763 billion in interest on its debt for fiscal year 2024. It is the second-largest government expenditure, after Social Security.
At the time of writing, Bitcoin is trading at $56,730, up 3.35% on the day.
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