"HOLY SH*T: To Everyone Who Owns Crypto” - Lyn Alden Bitcoin Interview

The the point of all that is whether it's whether it's gold, whether it's high quality real estate, whether it's high quality equities, those are generally things you want to own. Obviously, Bitcoin as well. And just you you just want to be careful of your enthusiasm when you're buying it. You know, you you want to you don't when when it's just all over social media, when it's at a circularly high valuations, that's when you generally want to have a pause and say, "Okay, even though there's money printing, can this thing still have 5 or 10 years of being dead money?" Um but other you know, it's basically buying scarce assets at reasonable prices, trying to manage your location if possible, uh trying to make sure on the right side of trends where possible. Hey guys, welcome to Everyday Finance. The independence of Bitcoin is giving way to a new reality in which its price movement closely resembles tech ETFs and software stocks, acting more like a typical institutional asset and less like an anomaly. A planned controlled atmosphere marked by calm weekends, subdued cryptocurrency performance, and high-frequency bots skimming liquidity is replacing the period of unpredictable retail-driven frenzy. Oh. This is a fundamental movement of power, as Lyn Alden points out. With large amounts of money moving through ETFs and regulated brokerage accounts rather than conventional cold wallets. Due to this change, capital has been concentrated in Bitcoin and dollar-backed stablecoins, causing the larger altcoin market to stagnate. In the end, the market has developed into a more institutionalized environment that puts patient capital and more general tech trends ahead of speculative enthusiasm, creating a financial ecosystem that is less chaotic but more well- planned. I think it could. I mean, well, the funny thing is the fiat system as we know it only goes back to the '70s. >> Mhm. I think if we go back a little further, we can say it kind of goes back to the dawn of the telecommunications age. Um because and I I talked about this a lot in broken money. >> Yeah. Which is for most of human history, like information couldn't really go faster than humans could get somewhere. So, by by foot, by horses, by ships. Fastest you could do is like, you know, birds or like fires in the night or something, but that's not high bandwidth. So, so you really you were kind of constrained. Once we had the telegraph, so it was invented in say the 1830s, it wasn't widely deployed like cross cross-ocean until like the 1860s. Um you started to be able to to share fairly high bandwidth information around the world. By the time it it it wasn't wasn't until the early 1900s you were going across the Pacific. Um and at that point, you could do transactions in at the speed of light, but not settlements. You know, settlements, how do you do irreversible value transfer? Well, you ship gold and you audit and insure the gold and and that you know, it's it's a whole expensive lengthy process. And that delta, that mismatch between fast transactions and slow settlements was like a godsend to the banks and the central banks. They said, "Oh, you need a middleman." It centralizes all the money. >> It centralizes all the money. It's it's a massive tailwind for the money centralizers. Before it's not that banks didn't exist before then, it's not even that central banks didn't exist before then in some cases. >> [snorts] >> It's that their services are more optional because you're you could still just literally hand a coin to someone or or but when you literally are doing when when when commerce is happening globally and most money's slow, it's those intermediaries that have all the power. And so, from from really the dawn of the telegraph until the dawn of Bitcoin, there were there was no there was no fast settlement. And then so, Bitcoin gets Bitcoin gets uh developed and then even then, of course, has no it's worth nothing. It has no network effect. It's a novelty. So, even, you know, for the first say decade of its life, it it wasn't moving the needle at all. Even today, it's it's now it's increasingly part of the conversation, but it's still a small asset in the grand scheme of things. Um but basically, I I would say that we we've reached the height of fiat currency in the sense that we've we've been in this period of time where there was no alternative between fast transactions and slow settlements. And now we have alternatives. And then in in while fiat currencies enjoyed that kind of monopoly on what works, they broke all their ledgers. They they bloated their entitlement systems. They built kind of social insurance with the idea that every every generation's going to be as big or bigger than the prior one. And all those things are kind of coming home to roost. Um so, I do think that one, I think this cycle will last a lot longer than people think. I mean, that's part of why I use nothing stops this train. There's two sides of it. One is no matter all these attempts they're going to try to reduce the deficit spending, they're almost all going to fail. So, people were really excited about Doge. I was like, "Nope, here's why." Didn't even move the needle. Um so, it's on one sense it's it's bearish, but it's also saying it's also the wheels are going to be on the cart longer than you think. Just because I think this is going to be very stretched out uh cycle. I mean, there were people that thought the global financial crisis was going to break it all. There were people that thought COVID was going to break it all. There then there people that every crisis they when when the regional bank crisis happened, like, "This is it." And you know, it's always you know, it's it's always like next year or next, you know, 5 years. Um I mean, I I there's only so far you can look out because like literally, you can have political structures be entirely different in say the 2040s. >> Yeah. You know, so I I look out something like a decade. Um in the US, for example, that's when our social security uh trust fund uh technically the surplus runs out. We've got something like a 3 trillion surplus in there just from prior overpayments. That's now in draining mode because we're very top-heavy. Um and then either Congress has to kind of say, "Well, all retirees are now going to get, you know, 80 cents on the dollar or 75 cents on the dollar, or we're going to print the difference." I don't know which one that will be. Probably. Yeah, that that actually requires a decision at that point cuz it's kind of a separate pool of money. So, it would be it would be interesting to to monitor. Um and I mean, the political discourse around that time is going to be like lit. Mhm. >> Um and so, but I think I I look mostly into the 2030s and say nothing really seems like it's going to slow this down anytime in that investable time frame. Look you look out further than that and you get into science fiction. Yeah, so. >> We will get onto that. So, if this is going to take longer, what should people be doing now to protect themselves through this? Well, one, I mean, for people that have the luxury, it's making sure you're living in a spot that you're comfortable with. Uh either either in terms of the political structures, the social structures. Um you know, all all the things that you somewhat can control. On average, wealthier people have more optionality there than than people that are lower on the income stack. Um trying to make sure you either your job is AI-resistant or that you're using AI. Uh you're not just kind of ignoring the trend, that you're you're you're trying to to use the tools to be as as competitive as you can be. Yeah. Um for long I mean, owning where possible scarce assets and trying to avoid bubbles. Uh because even scarce assets can have 5, 10 years of price declines if they were bid up into a manic bubble. Is this gold that you're really talking about here? Um I I so I think gold was overbought. Um I hesitate to call it a bubble because if if we do have a long-term popping of like the whole sovereign debt crisis, gold has to get pretty insane numbers to like truly have like a 10-year lost like a lost decade. Um but I mean, gold had a lost decade really after 2011. It got bid up to to high levels. Um and I think it's I mean, it's obviously taking a breather now for a period of time. But I think I mean, there for example, I use Costco stock as an example. Uh it's like people look at it as like the most bulletproof company in the world. It's one of the few companies where like employees generally like it, customers like it, and investors like it. Usually, you only get one or two out of the three. Somehow they you know, >> It's the trifecta. >> It's the trifecta. A lot of it probably rests on the hot dog. Um uh but Costco trades like 50 times earnings. Crazy. Uh for a a you know, 40-plus-year-old blue chip retailer. They trade it they trade it Yeah, that's like tech stock valuation. >> stock valuations. Um so, nothing stops that from one day going down to 25 times earnings, which is still actually rich. That's still a premium multiple. Um and it doesn't have to happen all at once. A really good example is in the late '90s, we think of it as the tech bubble. But for example, Walmart was trading 50 times earnings. Coca-Cola was trading 50 times earnings. They had very good growth in the in the '90s. And over like the next 10, 15 years, their stock prices basically just went sideways. Um you know, sideways can be up up 20%, down 30%, up, you know, it's not literally sideways, but it was just a chop >> Chop consolidation for like 10, 15 years while their earnings would double or triple until literally through time, they'd be trading at 20-something times earnings. >> Mhm. And that could absolutely happen to stocks today that look like Costco. Um or like a couple years ago, I mean, recently we've had selves in the in the Mag 7. You know, these high-quality companies that some some in some case people were paying really high multiples for. Um their fundamentals are still doing fine in many cases, but but you know, especially with the capex and AI, um they've been running into frictions. So, the point of all that is whether it's whether it's gold, whether it's high quality real estate, whether it's high quality equities, those are generally things you want to own. Obviously, Bitcoin as well. And just you you just want to be careful of your enthusiasm when you're buying it. You know, you you want to you don't when when it's just all over social media, when it's at a circularly the valuations, that's when you generally want to have a pause and say, "Okay, even though there's money printing, can this thing still have 5 or 10 years of being dead money?" >> [snorts] >> Um but other, you know, it's basically buying scarce assets at reasonable prices, trying to manage your location if possible, uh trying to make sure on the right side of trends where possible. As balance sheet. Runoff's decline in fiscal deficits are directed toward military, healthcare, and pensions. Liquidity in this bear market is characterized by a slow, steady trickle rather than a sudden torrent. Bitcoin has evolved into a conservative, tech-aligned benchmark that behaves more like long-term collateral and a strategic treasury asset than a speculative instrument. Even though supply is still limited and AI-driven productivity increases assist control inflation. In this setting, digital dollars more especially, dollar-backed stable coins quietly dominate everyday international transactions and cross-border settlements. While gold maintains its value and higher-risk altcoins struggle under the weight of excess supply. The market is developing into a professionalized environment where Bitcoin acts as a steady anchor. Amid wage compression and continuous deficit spending as institutional frameworks like spot ETFs and regulatory regimes like MiCA comes into effect. In 2026, in the end, this consistent flow of capital points to a change toward a more robust financial system where digital assets are incorporated into the actual economy. The next significant breakout will likely be brought about by more extensive monetary easing or a final resolution to the ongoing fiscal adjustments. Uh so, for a lot of people, they have like 0 or 1%. So, I mean, I I say, "Well, I think zero is the wrong number." Yeah. Uh I you know, that's that's kind of my kind of baseline is like there's a lot of numbers that can make sense. Zero's not really one of them, I think. Uh so, you start by getting off zero. Um I I think 5% is reasonable. I mean, it's funny. If you look at portfolios, um gold has been underweighted in portfolios for a long time despite uh a lot of evidence showing how useful it is for portfolios, especially replacing some of the bond component. Uh so, my view is always have more gold than like the baseline, which is almost nothing in a typical kind of managed portfolio. And with Bitcoin, I mean, I was early to put, say, 5 or 10% in. Um now, in my personal like holdings, it's I hold cold storage Bitcoin. Uh you know, I I do venture in in Bitcoin. Um so, for me, it's obviously much higher than that 5 to 10%, especially if you go through a couple cycles and you don't really sell, you just buy >> It just becomes higher. >> higher. Um But the way I kind of look at it is like I think 5% can make a lot of sense. And then if someone, you know, if they if they do a podcast circuit and, you know, listen to like your show and other shows and then they read the books and they, you know, they spend a you know, 500 hours in the space, I mean, they then they know maybe they want they might want to dial that number up, but they're the ones that know when to do that, not not me telling them. Uh the short answer is potentially. So, I started pointing out the the gradual print scenario. Um I mean, in my research service over the past couple years, I've been kind of aiming that roughly in this 2025 period, we would have we would have had it. Uh and that was actually the Fed's own projections roughly, too. Uh it was one of the few times I agreed with the Fed. Um cuz a lot of it was just kind of pretty like unavoidable math. Mhm. Um and so, when we got to late 2025, uh we started to get that gradual print scenario. It started to kick in in December. Uh so, we're actually a few months into the gradual print now in in spring of 2026. Um so, Iran war aside, that's the baseline is that they're growing the in the US, they're growing the base money supply um roughly in line so that it's a pretty standard percent of GDP. Um And they're not trying to do that to stimulate, they're trying to do that to keep fractions or bank lending just the the wheels just kick the can down the road indefinitely. Um the war in Iran, it doesn't immediately threaten that, but if it stays closed for months and you start to get if if gasoline in the US doubles and other countries just, I mean, like, you know, like Egypt starts to shut off at 9:00 p.m. every night and, you know, the Philippines is gas rationing and and Europe, you know, is freaking out. If if if it's just across the board if there's economic turmoil, um you could start seeing on average rising US deficits. Uh and then the central bank, you know, it can run into like liquidity issues. And they have to kind of up their expected rate of money supply growth to kind of keep the treasury market functioning, to keep the interbank lending market functioning. And then it comes down to will will a highly polarized Congress agree on a stimulus? Especially for a a war we began, right? That's tricky. It's like, "Oh, hey, your gas and prices are high because we initiated a war, but we here's a gasoline stimmy." You know, that's that's good luck getting that through Congress. Um and so, there are certain like kind of binary decisions at that point that I'm not going to try to predict what even cuz not even being tabled in Congress yet, really. Yeah. But the first step is to just if asset prices struggle, if consumers struggle, if the economy struggles, all of that impacts tax receipts and that starts to widen the deficits. Do you start to inch out of a potential gradual print scenario? But I don't think we're there yet. >> As indicated by declining interest in US spot ETFs, dwindling CME futures activity, and ongoing Coinbase discounts that imply capital is pulling back. Wall Street's present engagement with Bitcoin seems to be motivated more by transactional convenience than by deep-seated conviction. Lyn Alden claims that institutional hot money prioritizes basis trades and liquidity captures over the underlying ideology of the asset. And that corporate treasuries and quantitative funds are increasingly defining this market cycle rather than retail enthusiasm. AI-driven cost reductions, ongoing dollar deficits, and a general quest for hedges against monetary the basement all contribute to the macroeconomic environment's continued favorability for scarce assets notwithstanding. This tactical retreat, rather than being a failure of the narrative, Bitcoin's current price standstill is a reflection of a jagged adoption curve. Pointing to a future in which the fatigue of initial ETF flows may eventually be replaced by deeper stablecoin infrastructure, changing minor dynamics, and a new wave of purchasers. This change signifies the end of speculative mania and the beginning of a more professionalized but unsure market period where long-term investors have to deal with the strategic moves of traditional finance.