FBTC: Powerful Drivers Align

Summary Fidelity Wise Origin Bitcoin Fund ETF benefits from fiat currency concerns, dovish central banks, and lower rates, driving strong medium- and long-term ￰0￱ is supported by increasing institutional adoption, friendlier regulation, and the potential for future central bank Bitcoin ￰1￱ Bitcoin remains volatile, dips—especially near previous lows—are considered attractive buying opportunities for FBTC ￰2￱ metals have been grabbing most of the headlines in recent months as they surge higher, but it's also been a solid year for Bitcoin and the Fidelity Wise Origin Bitcoin Fund ETF ( FBTC ), which made a new all-time high in ￰3￱ article looks at why Bitcoin and FBTC should continue higher over the medium and long term as several powerful drivers ￰4￱ Concerns, Dovish Banks and Lower Rates My last article on FBTC was published back in May and titled " Breaking Out On Fiat Fears. " To summarize, Moody's had just downgraded the US credit rating, further eroding trust in the US ￰5￱ ignited a strong move in FBTC to all-time highs, as Bitcoin is an alternative to fiat ￰6￱ then, the situation for the US dollar and for other global currencies has ￰7￱ Trump's "Big Beautiful Bill" passed and is set to deepen fiscal deficits, at least over the next few years, until the US government can grow its finances sufficiently (an optimistic view).

More recently, the Fed shifted dovishly and resumed its cutting cycle. A cut in September initially led to a brief drop in Bitcoin, but it has since recovered and made new all-time highs in ￰8￱ cuts are on the way, with 25 bps in September nearly fully priced, 25bps in December around 80% likely according to the CME FedWatch ￰9￱ may just be the ￰10￱ now have Trump pick Steve Miran as a new governor, and he is advocating for aggressive cuts towards the low 2% ￰11￱ is around 2% ￰12￱ when current Chair Powell is replaced in May, he will almost certainly be replaced by a dove to guide rates towards this ￰13￱ dovish shift in the Fed highlights that the Fed will ease at the slightest hint of economic ￰14￱ have framed the shift as "risk management," but unemployment of 4.3% is not necessarily a level to make a series of cuts, especially when inflation is on the ￰15￱ Economics The apparent abandonment of the inflation side of the Fed's mandate is particularly positive for ￰16￱ is considered an inflation hedge.

Furthermore, the divisions in the Fed (the recent meeting had very divided opinions on where rates should be in December) and the upcoming Chair change could lead to a muddled policy. I already think the Fed may be making a policy mistake by cutting aggressively just when inflation is a risk ￰17￱ together, the rate cuts, the rise in inflation, and the lack of cohesion at the Fed all spell trouble for the US dollar and make alternative currencies more attractive. And, of course, Bitcoin is a global asset, and global currencies have their own domestic ￰18￱ ECB has cut 8 times, and just look at the Swiss National Bank, which has cut back to 0% and has nowhere to go but negative rates ￰19￱ the US economy should finally fall back into a recession, the Fed could do the ￰20￱ any case, the trend is clear: rates are heading ￰21￱ Lower rates make alternative assets like Bitcoin and gold more ￰22￱ yields are at 5%, bonds may be considered a safe place to park some cash and earn modest ￰23￱ yields are 2%, bonds are no longer keeping up with inflation, and the investment no longer makes ￰24￱ money is forced to look ￰25￱ Support It's becoming easier to buy and own crypto, thanks to the launch of ETFs like FBTC and ￰26￱ Trump administration is crypto-friendly and swiftly pushed through the CLARITY Act, the GENIUS Act and established a federal "Strategic Bitcoin Reserve." The latter stopped short of actually buying crypto, but it may be a matter of ￰27￱ this week, Deutsche Bank suggested central banks will end up holding Bitcoin : A strategic Bitcoin allocation could emerge as a modern cornerstone of financial security, echoing gold’s role in the 20th ￰28￱ volatility, liquidity, strategic value and trust, we find that both assets will likely feature on central bank balance sheets by ￰29￱ banks are not buying right now, but the prospect of this in the future is a reason to be ￰30￱ only have to look at gold's move in 2024 and 2025 to see what central bank buying can ￰31￱ the meantime, FBTC can benefit from the institutional rush to ￰32￱ a friendlier regulatory environment under the Trump administration, nearly 60% of institutional investors plan to boost their crypto allocation in the coming year, and average exposure is expected to more than double within three years, according to State Street's annual digital assets and emerging technology survey released on ￰33￱ are late to the crypto party and are ￰34￱ Street continued, The average portfolio allocation across a range of digital assets stood at 7%, the survey found, and that's expected to jump to 16% by ￰35￱ will be powerful support.

Indeed, Bitcoin has a lot of powerful ￰36￱ Times With strong institutional buying, the potential for central bank buying, and the President of the US on your side, the long-term outlook looks ￰37￱ Basics FBTC has been somewhat eclipsed by the iShares Bitcoin Trust ETF ( IBIT ), which has grown its AUM to $97B. Data by YCharts This isn't necessarily a reflection of better ￰38￱ is almost no difference between the two ￰39￱ both have an expense ratio of 0.25% and the returns are almost ￰40￱ by YCharts I think it may have something to do with BlackRock's iShares series being more visible and ￰41￱ given the choice between two brands, most people choose the one they know ￰42￱ consideration is that FBTC and IBIT have different custodians, and Fidelity is a ￰43￱ you are worried about safety, it may be wise to spread assets between both ￰44￱ Bitcoin is a volatile asset and has experienced several major bear markets in the last ￰45￱ last one was in 2021-2022 when Bitcoin dropped 77%.

While the outlook in 2025 looks better than it was in 2021, another large drop can't be ruled out. I would be particularly careful if the trend from the 2022 low ￰46￱ The 2021 highs around $65,000 might be tested in a major bear market, but I am doubtful any drop would get this far, and I would view it as a great buying ￰47￱ 2025 has been a great year for crypto, Bitcoin and ￰48￱ downgrade to US government debt and the dovish shift by the Fed, despite the backdrop of rising inflation, make Bitcoin attractive compared to fiat-backed assets. Furthermore, deregulation and a supportive President have led to an institutional rush to ￰49￱ some point, central banks may join the buying ￰50￱ FBTC outlook for the long term, therefore, looks better than ever as powerful drivers ￰51￱ doesn't mean the path higher will be smooth, but it does mean that dips should be considered buying opportunities.