Macro expert Lyn Alden says she’s “very bullish” on Bitcoin (BTC) over the longer term amid the soaring interest payments of the US government to its more than $35 trillion national debt.
Alden notes in a recent newsletter that BTC has been highly correlated with global liquidity, a trend the analyst expects to continue.
“My five-year outlook on the asset is very bullish, but the volatility must be accounted for in position sizes for a given portfolio and its requirements.”
According to Alden, one reason she believes Bitcoin will trade higher over the long arc of time is the expectation that the US government will face “structurally high deficits” in the coming years.
Citing data from the Congressional Budget Office (CBO), Alden says the US national debt could soar to $55 trillion in just a decade.
“So that’s the conservative baseline, which calls for over $20 trillion in net new public debt additions over the next 10 years.”
Alden says the growing interest payments to the ballooning national debt stimulate the US economy, adding to global liquidity and boding well for BTC.
“Interest expense poured out from the federal government into the private sector, which stimulated some parts of the economy since it’s part of the widening deficit. The economy indeed went on to hold up better than most expected, and inflation proved stickier to get back down to the 2% target than most expected.”
Data from the Treasury Department shows that the US government is paying $763 billion in interest on its debt for the 2024 fiscal year. It is the second-largest government expense, just behind Social Security.
At time of writing, Bitcoin is trading for $56,730, up 3.35% on the day.
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