Head of research at digital asset manager CoinShares, James Butterfill, claims there is one catalyst that could send Bitcoin (BTC) and the cryptocurrency market into a crypto bull run immediately.
Butterfill predicted that the US dollar could weaken and a BTC bull run could resume in an interview with trader and investor Scott Melker, aka the Wolf of All Streets.
He claimed that the high correlation between Bitcoin and equities at the start of the year had “nothing to do with [BTC] being a risk asset,” but rather was the result of the Fed’s aggressive policies.
Executive, you said:
“Until the Fed backs off, […] we’re not really going to see any kind of measurable rise in the bitcoin price.”
Early signs that typically show a “real weakness” in the economy, he said, would be important indicators to look out for, for any kind of measurable rise.
He elaborated, saying that the growing narrative where people see the Fed as an entity that’s pushing them into recession due to policy mistakes is the reason for the divergence in Bitcoin’s correlation with equities in recent times, and that this trend will continue.
Butterfill said he spent a lot of time looking at positioning in the dollar and noted, among other things, that the US Dollar Index (DXY) is very high and the Commodity Futures Trading Commission futures positioning is elevating, “highlighting quite elevated long position for the dollar.” The host and the guest agreed that the Fed pivot is likely inevitable and that the bear market is temporary.
Therefore, he came to the following conclusion:
“So we know the dollar is very overvalued. So when the Fed does pivot, the trade-weighted dollar could really flip quite quickly and quite sharply, and that would be quite supportive for something like bitcoin.”
According to Butterfill, the bear market is nearing its end and has entered a holding pattern. Clients are allegedly saying things like, “I’m just waiting for the Fed to pivot, and then I’m buying bitcoin,” he said.
When asked why now might be a good time to buy Bitcoin, he said, “I think that:
“For me, now is an interesting entry position. […] There aren’t many opportunities that come along when bitcoin’s on sale like it is right now.”
Meanwhile, as previously reported, Kevin O’Leary, aka Mr. Wonderful, a well-known Canadian businessman and TV personality, argued that Bitcoin (BTC) could break out of the $19,000-$22,000 trading range once the US passes the “Stablecoin Transparency Act.” This could happen soon after the November midterm elections.
The Bitcoin price was $19,140 at 9 a.m. UTC on Thursday, unchanged from the previous day and the previous week. It has dropped by 2% in the past month and by 70% over the past year.
Watch the full interview here:
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