CoinShares Head of Research Says Catalyst Could Trigger Bullish Turnaround for Bitcoin (BTC)
A top executive from digital asset manager CoinShares says a catalyst has the potential to trigger a bullish turnaround for Bitcoin (BTC) and crypto markets.
In a new interview with Scott Melker, CoinShares’ head of research James Butterfill says that the US dollar is likely overvalued, and that a trend change for the USD could trigger a reversal in risk assets like Bitcoin.
Butterfill says that if the Federal Reserve swings from its hawkish stance, the dollar could finally weaken and trigger a Bitcoin bull run.
“I spent a long time looking at positioning in the dollar and DXY [US Dollar Index]. We know… that’s really loud. I think it is high in the mid 1980s. There are certain other valuations you can look at. You can look at sentiment or the CFTC [Commodity Futures Trading Commission] futures positioning and it is uplifting, highlights rather elevated long position for the dollar.
If you look at something called purchasing power parity [PPP]that’s the highest it’s been since 1985…
So we know the dollar is very overvalued. So when the Fed swings, the trade-weighted dollar can really turn around quite quickly and quite sharply, and that would be quite supportive for something like Bitcoin.
Butterfill says the price of Bitcoin probably doesn’t have much longer to fall, making BTC’s current price tag a rare opportunity for bulls.
“I think now is an interesting starting position. Because I don’t think there is a big floor in the prices. You might have to wait three to six months for a measurable price increase, but there aren’t as many opportunities when Bitcoin is on sale as it is right now.”
At the time of writing, Bitcoin is changing hands at $19,204.67.
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Featured image: Shutterstock/Eugenia Porechenskaya
