Fidelity: Bitcoin Is 'Lone Loser'

Jurrien Timmer, head of global macro at Fidelity Investments, has opined that Bitcoin has been “a lone loser” this year. 

“Bitcoin has been the lone loser this year in terms of performance,” Timmer said in a recent social media post. 

He has noted that tailwinds from Bitcoin treasury companies are uncertain, and they are now adding more downward pressure.  

“What was widely considered to be a tailwind from Bitcoin Treasury companies offering a Bitcoin ‘yield’… has turned into a possible headwind,” the analyst added. 

“Mature” bull market 

Technical analysis indicates Bitcoin has fallen below a key upward trend, suggesting momentum is weakening. This raises questions about whether the current 4-year Bitcoin cycle is ending.

“Looking at the evolving wave structure of Bitcoin’s maturing network curve… the most recent bull market (from around $16k in 2022) looks pretty mature,” he said. 

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Successive waves since 2010 are smaller in magnitude but longer in duration. This indicates that each Bitcoin cycle is slowing down.

Macro context 

Timmer has noted that the market is approaching year-end with strong “earnings momentum, a better sentiment backdrop following the palate-cleansing of speculative excesses,” and “an accommodative Fed.” 

Corporate profits are coming in stronger than expected, thus supporting equity markets. Bitcoin is underperforming stocks, which is rather embarrassing.  

Interest rates have been lowered, which has helped to encourage borrowing and investment. However, Bitcoin is failing to benefit from this.

Meanwhile, minimal turbulence in traditional fixed-income and forex markets reduces the urgency for alternative investments like Bitcoin.