Jurrien Timmer, a high-ranking executive at Fidelity Investments, provided in-depth analysis on the potential impact of the Securities and Exchange Commission’s (SEC) recent approval of spot Bitcoin ETFs.
Timmer highlighted that this approval marks a significant milestone in Bitcoin’s journey to becoming a mainstream financial asset.
However, it could also lead to short-term price volatility. He highlighted the importance of focusing on Bitcoin’s adoption curve and the influence of monetary policy on its value.
The price of Bitcoin (BTC) has suffered a massive decline from its peak of $49,000 shortly after the ETF was approved. According to data from CoinGecko, the leading cryptocurrency is currently trading at $42,408.
Short-term downturn
One of the main concerns raised by Timmer is the possibility of a “sell-the-news” reaction in the Bitcoin market. He predicts that the market may need time to consolidate recent gains following the significant ETF approval development.
Supporting his opinion, Timmer highlighted recent trends in open interest (OI) and movements in the Bitcoin-sensitive Goldman Sachs stock index.
He expects OI to decrease as asset managers move from futures to spot positions, a transition that could introduce volatility into Bitcoin prices in the short term.
Adoption takes time
Timmer expressed enthusiasm for the SEC’s decision, seeing it as a potential catalyst for broader acceptance of Bitcoin as a commodity currency.
However, he cautioned that achieving widespread adoption could take time.
According to Timmer, Bitcoin currently sits in the middle of what he calls the “fair value range,” which is influenced by the network’s growth rate and real interest rates.
