Bitcoin (BTC), difficult to return to this year's highest price... Is it due to AI and semiconductor stocks?

▲ Bitcoin (BTC)/AI generated image

A warning has emerged that Bitcoin (BTC) may find it difficult to reclaim its all-time high this year, as it has lost funding dominance to artificial intelligence (AI) and memory semiconductor stocks. A harsh diagnosis even suggested that "nothing will come to save Bitcoin."

According to the cryptocurrency media outlet Benzinga on July 8 (local time), macroeconomist Lyn Alden analyzed that Bitcoin has been pressured by a massive shift of funds towards AI and semiconductor stocks. Memory semiconductor stocks, in particular, have emerged as the "fastest horse" in the market. Bitcoin recorded a high of around $124,000 at the end of last year and has fallen by about 3% in the past month.

Alden explained that large cloud companies increased their AI investments, which pressured their free cash flow. Investor funds also moved away from Bitcoin and gold. He stated, "Nothing will come to save Bitcoin," and "Bitcoin must survive on its own value." However, while he analyzed that Bitcoin's valuation was approaching the lower end of its historical range, he did not provide an exact bottom.

This market cycle has been characterized more by corporate adoption of Bitcoin than by individual investors. Compared to past cycles, the movement of small holders transferring Bitcoin to self-custody wallets is also not distinct, according to the analysis. Alden also assessed that stablecoins and tokenized real-world assets have not created sustained demand.

He also drew a line on expectations of a liquidity surge. Alden predicted that the money supply would increase gradually rather than seeing a large-scale expansion of currency supply in the short term. He explained that an environment where assets with scarcity and quality are purchased during periods of weak investor sentiment is advantageous.

Alden stated that in his base scenario, Bitcoin is unlikely to reclaim a new all-time high this year. However, if it continues its long-term adoption path, he expects it to enter a new price range of around $100,000 within the next two years. Regarding MicroStrategy's (MSTR) Bitcoin-linked revenue products, he advised that they should be sold cautiously, considering the extreme risks that could arise during a sharp price decline.

[Key Article Summary]

-Lyn Alden analyzed that Bitcoin has been displaced from its position as the market's "fastest horse" as funds moved to AI and memory semiconductor stocks.

-Alden stated, "Nothing will come to save Bitcoin," emphasizing Bitcoin's own long-term adoption path rather than large-scale liquidity supply.

-Alden predicted that Bitcoin is unlikely to reclaim a new all-time high this year but expects it to enter a new $100,000 price range within the next two years.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*