While a positive ruling on Grayscale’s attempt to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF has caused Bitcoin to rise more than 7% today, Arca Chief Investment Officer Jeff Dorman said the world’s largest digital asset will need a “significant catalyst” to break out of its range-bound territory.#fdusd $
“When you get positive ETF news, whether it’s Grayscale winning its case against the SEC or the actual approval of one of the many great Bitcoin ETFs, the crypto market definitely goes up,” he said in a recent interview.
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However, he warned that it is “too early” to see it as a panacea for continued growth, stressing that “real follow-through will only happen when BlackRock and other companies start to really promote Bitcoin in their filings.”
“If you’re looking for a short-term move in Bitcoin, we could see interest rates start to come back down or inflation pick up, which would lead to lower real interest rates,” Dorman said.
He believes that for most of the past year and a half, Bitcoin has “really just been tracking real interest rates,” and stressed that this correlation becomes particularly important when real interest rates start to rise.
Dorman noted that for much of this year, which has been dull for digital asset investors, Bitcoin has been acting as a “call option on future problems, with confidence in local governments and banks.”
“There was a massive loss of confidence in U.S. regional banks in March, which was a real positive for the price of bitcoin,” he said.
The big question is, what will be the next sentiment to impact the market?
