When veteran macro investors start using the word "violent" to describe expected price moves, markets tend to listen. Tavi Costa, Founder and Chief Executive Officer of Azuria Capital, is doing exactly that — arguing publicly that Bitcoin is "very undervalued" at current levels and that a sharp, potentially jarring repricing lies ahead, driven by the anticipated end of the Federal Reserve's aggressive interest rate hiking cycle.
Costa's thesis is rooted in a classic contrarian signal: capitulation. By his read, a meaningful cohort of former Bitcoin supporters have abandoned the asset, throwing in the towel after a prolonged period of macro headwinds and compressed risk appetite. For seasoned investors, that kind of sentiment wash-out is not a warning sign — it is a setup. When believers exit, the remaining holders tend to be structurally committed, the weak hands are gone, and the conditions for a sharp reversal quietly assemble beneath the surface.
The Fed Cycle as the Hinge Point
The core of Costa's argument is macro, not narrative. The Federal Reserve's rate-hiking cycle — the most aggressive tightening campaign in decades — has functioned as a gravitational ceiling on risk assets broadly and on Bitcoin specifically. Higher rates push discount rates up, compress valuations of long-duration assets, and drain liquidity from speculative markets. Bitcoin, whatever its unique monetary properties, has not been immune to those mechanics over the past two years.
But cycles end. And Costa's contention is that when this one does, the snapback for assets that have been disproportionately punished will be correspondingly sharp. He is not alone in that structural view — institutional strategists across fixed income and equities have been mapping the same inflection — but his willingness to apply it directly and forcefully to Bitcoin distinguishes the call. The word "violent" is deliberate. It signals not a gradual recovery but a compressed, momentum-driven re-rating that could wrong-foot those who capitulated too early.
Silver as a Companion Trade
Costa pairs Bitcoin's expected move with silver, an asset with its own complex relationship to monetary conditions. Silver carries dual demand drivers — industrial use and monetary store-of-value status — which makes it sensitive to both real-economy activity and macro liquidity cycles. By placing Bitcoin and silver in the same forward-looking frame, Costa is implicitly making a broader argument: that hard, scarce assets with monetary characteristics tend to move together when the liquidity tide turns. The pairing also signals that his view is not a Bitcoin-maximalist position but a macro portfolio call, one grounded in the behavior of real assets across rate cycles.
That framing matters for how professional allocators receive the thesis. A fund manager arguing for Bitcoin alongside silver is positioning the cryptocurrency as part of an established asset-class rotation playbook, not a speculative punt. It broadens the audience for the trade and lends structural credibility to the timing argument.
Undervaluation in a Sentiment Vacuum
The claim that Bitcoin is "very undervalued" deserves scrutiny on its own terms. Valuing Bitcoin is notoriously contested — there is no earnings yield, no dividend stream, no comparable corporate cash flow to anchor a discounted cash flow model. What macro investors like Costa tend to rely on instead are on-chain metrics, realized-price bands, historical drawdown depths relative to prior cycles, and the behavior of similar monetary assets in analogous rate environments. When Costa calls Bitcoin very undervalued, he is likely synthesizing some combination of those inputs alongside his broader macro framework about where real rates and dollar liquidity are heading.
The sentiment dimension is equally important. Markets price consensus. When a formerly crowded trade empties out — when the people who were buying on narrative abandon the position — the asset can trade well below what any fundamental or macro framework would justify, simply because there are more forced sellers than willing buyers in a given window. That is the vacuum Costa appears to be identifying: a price level held down not by deteriorating fundamentals but by the exhaustion of retail and institutional momentum that accumulated in the previous bull cycle.
What This Means for Allocators
Costa's thesis arrives at a moment when institutional positioning in Bitcoin remains cautious but increasingly systematic. Spot Bitcoin exchange-traded fund infrastructure has matured, custody solutions are robust, and the regulatory environment, while still unresolved in several jurisdictions, is clearer than it was two years ago. The structural barriers to allocation have fallen. What remains is a timing and conviction question — and that is precisely where a macro framework linking the Fed cycle to Bitcoin's repricing potential becomes relevant for professional portfolio construction.
If Costa is right that violent moves lie ahead for Bitcoin and silver, the implication is not simply that prices go up. It is that the window for positioning ahead of that move may be narrowing, and that the capitulation he describes — the exodus of former supporters — may itself be one of the more reliable contrarian signals available in the current environment. For allocators still sitting on the sidelines, the cost of being wrong in one direction is becoming asymmetric relative to the cost of being wrong in the other.
Written by the editorial team — independent journalism powered by Bitcoin News.