On Dec. 8, Jurrien Timmer, the director of global macro in Fidelity’s Global Asset Allocation Division, commented on a potential SEC update on Bitcoin.
However, it is “unclear if this would be a catalyst for a price surge or not,” he said.
He noted that current Bitcoin price action does not appear driven by traders speculating ahead of SEC news, as most BTC has been held long-term by “true believers”.
Could the murmurs of an SEC update on Bitcoin be the next big thing? Or a “sell-the-news moment?” That’s a tough one to answer, but let’s consider the key factors: 🧵 pic.twitter.com/3I4hS8VNdG
— Jurrien Timmer (@TimmerFidelity) December 7, 2023
Selling The News
The macroeconomics expert noted that it doesn’t appear that the runup in price is a wave of speculation looking to front-run any news. This is due to the small percentage of BTC that has been held for less than 3 months, in other words, short-term speculators.
However, there has been increased interest in Bitcoin futures recently, he revealed. This suggests some traders may be positioning for an announcement. They could sell futures to buy spot Bitcoin after the news.
“That’s not to say it will be a “sell-the-news” event, but it does suggest that the price action could be more two-sided.”
Moreover, the macro backdrop has changed from easy liquidity to tighter Fed policy, so the value proposition for Bitcoin is less compelling than in 2020-21, he noted.
He also mentioned M2 money supply, which was growing during the last crypto bull market but has been contracting since the Fed started tightening in early 2022.
“That makes the current chapter in history resemble the 1940s more than the 1970s,” he noted before concluding:
“All of which makes the value proposition for both gold and Bitcoin a bit less urgent today than it was a few years ago.”
M2 Money Cycles
M2 money supply and Bitcoin cycles have been correlated previously with some analysts suggesting that this has been the driver of markets rather than the halving events.
I continue to believe that #bitcoin‘s 4 year cycles are just coincidences and have little to do with the halvenings.
Global M2 money supply has actually been having its own “4 year cycles” as of late, and those cycles have been reflected in most risk assets, including bitcoin pic.twitter.com/kMQMNdp9Gq
— Pledditor (@Pledditor) September 5, 2023
Timmer also described Bitcoin as “a form of digital gold, with a venture twist.” “I think of it as exponential gold,” he added. He concluded that spot BTC ETFs will ultimately be a driver of further investment into the asset.
“In my view, attention on the SEC’s deliberations around pending product applications could theoretically attract a new wave of investors or advisors who previously didn’t have Bitcoin on their menu,”
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