Bitcoin Faces Weakest Sentiment Cycle Amid Strategy's Sale, Macroeconomist Lyn Alden Says

Bitcoin is facing its weakest sentiment cycle yet, according to Lyn Alden, a Bitcoin-focused macroeconomist who said the asset must stand on its own as Strategy disclosed a $216 million Bitcoin sale earlier this week.

“I don’t think there’s anything coming to save Bitcoin,” Alden said in a Tuesday interview with journalist and Bitcoin educator Natalie Brunell, saying the asset's long-term success must come from its own fundamentals rather than external catalysts.

“The asset just has to survive on its own merits,” Alden said, pointing to Bitcoin’s underlying properties as a liquid, permissionless way to store and send value, instead of relying on a new source of demand.

Her comments come as institutional adoption and corporate treasury strategies have become features of Bitcoin's latest market cycle. On Monday, Strategy's weekly 8-K filing disclosed that it sold 3,588 BTC.

Bitcoin sentiment falls to a cycle low

Alden said the current downturn feels different from the 2022 bear market, when Bitcoin dropped to as low as $16,000 but enthusiasm among Bitcoin investors remained relatively strong.

“This is the lowest sentiment that I’ve personally seen on Bitcoin,” Alden said, pointing to a combination of fading narratives, a more corporate-driven market cycle and disappointment among investors.

Alden said her base case is that Bitcoin will not reach a new all-time high this year, though she acknowledged that the asset’s volatility leaves room for a sharp move higher.

“The base case that I would hope to see is just a lack of new bottoms in place” and a technical picture that points “flat to up rather than flat to down,” Alden said.

STRC found demand, but leverage remains a risk

Michael Saylor’s Strategy, the world’s largest corporate Bitcoin holder, has come under increased scrutiny during the downturn as investors reassess the risks around its Bitcoin-backed capital structure and preferred stock products.

Alden said Strategy’s STRC preferred stock has a role for investors who want exposure to the company’s Bitcoin strategy without holding the asset directly or taking on Bitcoin’s full volatility.

She noted that STRC has become the biggest preferred security in the market, but warned that higher-yielding BTC-linked products can encourage investors to take on additional leverage.

She added that Strategy’s recent steps to rebuild its reserve coverage and introduce additional safeguards were reasonable responses to the market stress, though the long-term performance of the product still depends on Bitcoin’s price action.

Alden pushes back on urgency around Bitcoin changes

Alden also discussed Bitcoin Improvement Proposal 110 (BIP-110), which aims to reduce network spam by limiting data-heavy transactions, including those used to store images.

Alden said she is generally cautious about efforts to change Bitcoin’s rules quickly, warning that some proposals could make the network more complex or affect its existing safeguards.

She said she would analyze the technical arguments for and against protocol changes, but criticized the way some proposals are presented to the public. Alden argued that framing a protocol change as an “existential issue” for Bitcoin exaggerates the stakes, calling that approach “incorrect marketing.”