Jurrien Timmer, Director of Global Macro at Fidelity, has shared insights suggesting that the recent trends in Bitcoin’s price are indicative of a short-term adjustment rather than a long-term trend reversal. Timmer made these observations in a thread on X.
According to Timmer, the current sell-off in Bitcoin is viewed as a short-term phenomenon, often described as a “hangover” following the launch of spot Bitcoin Exchange-Traded Funds (ETFs).
Bitcoin’s Price Consolidation Amid ETF Impact
In the past week, Bitcoin has seen a 6% decline, attributed to the market dynamics associated with the newly approved spot Bitcoin ETFs.
Despite some expectations of Bitcoin’s price dropping to find support within the $32K to $38K range, Fidelity’s Jurrien Timmer does not anticipate the sell-off to continue for an extended period.
Timmer characterizes the current situation as a “sell-the-news moment” and foresees a consolidation of recent gains. He suggests that market participants may have converted future spot positions into futures contracts or Bitcoin-sensitive equities.
Furthermore, Timmer notes the significant increase in open interest (OI) in recent weeks, along with fluctuations in the Goldman Sachs Bitcoin-sensitive equities index. He expects a potential decline in open interest in the coming weeks as asset managers transition their proxy exposure from futures to spot positions.
Considering factors such as the growth of Bitcoin’s network and prevailing interest rates, Timmer regards Bitcoin’s current price as reasonable.
He expresses optimism regarding Bitcoin’s long-term prospects, suggesting that this could mark a new phase in its widespread adoption as a commodity currency, albeit acknowledging that it might take some time to fully materialize.
Bitcoin Price Declines Contrary to Expected Rally
Spot Bitcoin ETFs have garnered nearly $1 billion in the first three days of trading, indicating a cautious but positive response from investors to these new stock market instruments that track the cryptocurrency.
BlackRock, Franklin Templeton, Invesco, and others collectively attracted $984 million in inflows since their launch. BlackRock, as the world’s largest asset manager, led the way with $508 million in inflows, followed by Fidelity with $442 million.
The approval of these funds by the U.S. Securities and Exchange Commission (SEC) was a notable milestone in the cryptocurrency space, marking significant progress after more than a decade of rejections. Supporters anticipate that the availability of spot Bitcoin ETFs will attract new investors to the cryptocurrency, potentially contributing to its long-term price growth.