Bitcoin (BTC-USD) rockets past $43,000 on Wednesday as U.S. regulators continue discussions surrounding the crypto space. Sean Farrell, vice president of digital asset strategy at Fundstrat Global Advisors, discusses what the Federal Reserve's expected monetary policy in 2024 could mean for cryptocurrencies and how likely it is that the Securities and Exchange Commission (SEC) will approve a spot Bitcoin ETF approved.
“We obviously have… an ETF approval that is expected to happen in a few weeks, which… I think should attract a new cohort of investors and increase inflows into digital assets,” Farrell says.
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Video transcript
DIANE KING HALL: When you think about where crypto is now, you say, “Now is the right time to fully enter the market,” that’s a quote. What is the theory behind it?
SEAN FARRELL: Yes. First of all, thank you for having me. You know, right now we have this perfect mix of macro and industry tailwinds. You know, of course everyone knows the Fed's dovish sentiment a few weeks ago or last week, rather it really kept the bears on their heels, you know, it certainly indicated that inflation was being tamed. And whether that's the case or not, it seems like the worst of the tightening is behind us.
And then, of course, from an industry perspective, as you alluded to, we have an ETF approval that's expected to happen in a couple of weeks, which I think will attract a new cohort of investors and the inflows into the digital world likely to increase assets. And then at the end of the first quarter, the halving is coming up in the second quarter. So there really is this perfect storm of positive tailwinds for next year.
JOSH LIPTON: And, Sean, just to emphasize this one point here: Bitcoin ETF: I'm curious if you think this is a real Bitcoin ETF. When we see approval, maybe early next year, right, do you see that? a truly positive catalyst for Bitcoin? Because the JPMorgan team was interesting, Sean. I don't know if you saw this note. You recently told customers. They actually gave it a pretty high chance. They believe this is ultimately a sell-the-news moment. But I suspect you don't agree with that?
SEAN FARRELL: Yes. Look, it depends on your time frame. And we'll be watching closely how we handle the ETF approval, because functionally, we expect that even if the ETFs are approved, they'll be approved between January 8th and 10th You will not see any significant inflows until these products are launched.
And so there's certainly a scenario where people could lead the ETF news. And perhaps you will experience an acute decline after the actual approval. But, you know, I think what we tell our clients is that it's probably not worth trading around in an overly nice way just because we think any consolidation after ETF approval will be short-lived.
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