Short Description: The Fed’s balance sheet will expand “gradually” to match GDP growth, says economist Lyn Alden — not a “big print,” but still a path of monetary debasement.
Read Time: 2 minutes, 30 seconds
The U.S. Federal Reserve is entering a prolonged phase of monetary expansion, but not the dramatic “big print” that many Bitcoin believers expected, according to economist and Bitcoin advocate Lyn Alden. In her February newsletter, she outlined a base case where the Fed’s balance sheet grows “approximately at the same proportional pace as total bank assets or nominal GDP.” This “gradual” pace of money printing is expected to provide a mild, persistent tailwind for asset prices rather than a sudden surge. Alden’s view suggests the primary investment strategy remains owning “high-quality scarce assets,” like Bitcoin, as the U.S. central bank’s policies continue to dilute the value of the dollar over time. Her analysis provides a nuanced take on Federal Reserve policy and its implications for inflation hedges, cutting through the market noise.
Recent uncertainty around interest rates following President Donald Trump’s nomination of Kevin Warsh as the next potential Fed Chairman has fueled market volatility. While perceived as more hawkish, Warsh’s appointment is not yet confirmed by the Senate. This political shuffle has created a foggy forward guidance environment, making traders jittery. Currently, only 19.9% of futures traders, according to the CME FedWatch Tool, expect a rate cut at the March FOMC meeting, down slightly from recent days. Fed Chair Jerome Powell himself acknowledged the difficult balancing act, stating, “There is no risk-free path for policy.” This backdrop reinforces Alden’s perspective that regardless of who is at the helm or the specific pace of expansion—whether it’s labeled quantitative tightening or easing—the long-term trajectory for the money supply continues upward, supporting her argument for monetary debasement.
Alden’s analysis cuts through the technical jargon of Fed operations, focusing on the ultimate outcome: a steady, long-term erosion of the dollar’s purchasing power. For investors, this shifts the focus from short-term rate speculation to a long-term imperative to hold durable, non-sovereign assets. While the upcoming FOMC meetings and leadership changes will drive short-term sentiment, the underlying trend of mild monetary expansion appears set to persist, subtly boosting “scarce assets” like Bitcoin under the surface of mainstream economic debates. Ultimately, Alden’s perspective suggests that Bitcoin’s value proposition is not reliant on a sudden crisis but on a gradual yet persistent shift in monetary policy that favors hard assets over fiat currency.
Short Summary: Economist Lyn Alden argues the Federal Reserve’s monetary policy is shifting toward gradual, persistent balance sheet expansion aligned with GDP growth, not a sudden “big print.” This sustained path of monetary debasement reinforces the long-term case for holding scarce assets like Bitcoin, even amid short-term uncertainty around interest rates and Fed leadership transitions. The fundamental trend of dollar dilution remains a key driver for alternative stores of value.
