Michael Howell and Lyn Alden are two of the sharpest macro minds in Bitcoin.
Yet on two recent interviews, they have seemingly diverging views on where we are in the cycle.
Here’s where they agree and disagree (with my added commentary).
A 🧵:
Yet on two recent interviews, they have seemingly diverging views on where we are in the cycle.
Here’s where they agree and disagree (with my added commentary).
A 🧵:
1/ Macro Backdrop Has Flipped
In late October, Howell warned that “Fed liquidity is falling and that’s a danger sign.”
Two weeks later, the Fed blinked.
QT ends December 1.
Repo markets are flashing stress.
The Treasury General Account (the government’s cash pile at the Fed) is now near $1 trillion, sucking money out of the system.
As Howell put it:
“They’re starving the repo markets of liquidity… this is money being sucked out of the system.”
In late October, Howell warned that “Fed liquidity is falling and that’s a danger sign.”
Two weeks later, the Fed blinked.
QT ends December 1.
Repo markets are flashing stress.
The Treasury General Account (the government’s cash pile at the Fed) is now near $1 trillion, sucking money out of the system.
As Howell put it:
“They’re starving the repo markets of liquidity… this is money being sucked out of the system.”
2/ Howell: Vindicated (Yet Still Cautious)
The Fed’s reversal validates his earlier warning, but he says it’s nowhere near enough.
“The Fed has been forced into action. But asset markets are still going to be short of cash.”
He estimates a $250B shortfall in bank reserves and expects QE to return by 2026.
His term: “Not-QEQE” means the Fed isn’t stimulating growth.
Rather, it’s just keeping the pipes from freezing.
The Fed’s reversal validates his earlier warning, but he says it’s nowhere near enough.
“The Fed has been forced into action. But asset markets are still going to be short of cash.”
He estimates a $250B shortfall in bank reserves and expects QE to return by 2026.
His term: “Not-QEQE” means the Fed isn’t stimulating growth.
Rather, it’s just keeping the pipes from freezing.
3/ Lyn's "Long Glide Higher"
Lyn sees the same liquidity squeeze but through a wider lens.
“Bitcoin’s been roughly flat for 12 months… this isn’t a bear market, just a weak part of the cycle.”
Her framework says halving cycles are fading, and macro liquidity is now Bitcoin’s main driver.
“We’re in a fiscal-dominant world. The government’s deficits are what keep asset prices elevated.”
So while Howell’s worried about the next six months, Lynn’s focused on the next six years.
Lyn sees the same liquidity squeeze but through a wider lens.
“Bitcoin’s been roughly flat for 12 months… this isn’t a bear market, just a weak part of the cycle.”
Her framework says halving cycles are fading, and macro liquidity is now Bitcoin’s main driver.
“We’re in a fiscal-dominant world. The government’s deficits are what keep asset prices elevated.”
So while Howell’s worried about the next six months, Lynn’s focused on the next six years.
4/ Two Liquidity Clocks, Same Time Bomb
Howell: “Fed liquidity is peaking into late 2025.”
Lyn: “Fiscal deficits guarantee balance sheet growth.”
Howell’s clock focuses on short-term liquidity flow.
Lynn’s clock focuses on structural liquidity expansion.
That said, both agree that liquidity rules markets.
Howell: “Fed liquidity is peaking into late 2025.”
Lyn: “Fiscal deficits guarantee balance sheet growth.”
Howell’s clock focuses on short-term liquidity flow.
Lynn’s clock focuses on structural liquidity expansion.
That said, both agree that liquidity rules markets.
5/ Chop then Pop
Both are saying the same thing but in different tones:
Liquidity is tight now (Howell).
Liquidity will inevitably expand later (Lyn).
So 2025 likely stays choppy as bank reserves remain below “adequate” levels.
Then 2026–2027 brings full QE and a new liquidity wave.
Bitcoin, being liquidity beta, will move in sync.
First the chop, then the pop.
Both are saying the same thing but in different tones:
Liquidity is tight now (Howell).
Liquidity will inevitably expand later (Lyn).
So 2025 likely stays choppy as bank reserves remain below “adequate” levels.
Then 2026–2027 brings full QE and a new liquidity wave.
Bitcoin, being liquidity beta, will move in sync.
First the chop, then the pop.
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