Jurrien Timmer, a senior executive at Fidelity Investments, has provided an in-depth analysis on the potential impact of the recent approval of Bitcoin spot ETFs by the US Securities and Exchange Commission (SEC).
Jurrien Timmer, a senior executive at Fidelity Investments, has provided an in-depth analysis on the potential impact of the recent approval of Bitcoin spot ETFs by the US Securities and Exchange Commission (SEC).
Timmer emphasized that this approval marks an important milestone in Bitcoin’s path 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) saw a massive drop from the high of $49,000 that was reached shortly after the ETF was approved. The leading cryptocurrency is currently trading at $42,408, according to data from CoinGecko.
Short-term bearishness
A key concern raised by Timmer is the possibility of a “selling the news” reaction in the Bitcoin market. He predicts that the market may need time to consolidate recent gains following the important ETF approval development.
In support of his view, Timmer pointed to recent trends in open interest (OI) and movements in the Goldman Sachs Bitcoin Sensitive Stocks Index.
He anticipates a decline in OI as asset managers transition from futures positions to spot positions, a transition that could introduce volatility into Bitcoin prices in the near term.
Adoption takes time
Timmer expressed his enthusiasm for the SEC’s decision, seeing it as a potential catalyst for broader acceptance of Bitcoin as a basic currency.
However, he cautioned that achieving widespread adoption could take time.
According to Timmer, Bitcoin is currently in the middle of what he calls its “fair value band,” which is influenced by the network growth rate and real interest rates.
