In a period where Bitcoin‘s price seems more likely to increase rather than decrease, Jurrien Timmer, the global macro director of financial giant Fidelity, suggested that holding a small amount of BTC in most portfolios could be quite important, thanks to the anticipation of the U.S. Securities and Exchange Commission’s (SEC) possible approval of the country’s first spot Bitcoin ETF.
Most Portfolios Hold Very Little Bitcoin
Highlighting Bitcoin’s highly volatile nature, Timmer mentioned that the risk-reward ratio of the largest cryptocurrency is far above that of many assets such as the S&P 500 and gold. He pointed out that holding a small amount of BTC in most portfolios could go a long way, adding that “Bitcoin has been in a class of its own in terms of risk-reward over this decade.”
The spot Bitcoin ETF proposed by Fidelity to the SEC for approval is listed on the website of the Depository Trust & Clearing Corporation with the abbreviation FBTC. This listing indicates that there is a very high probability of the spot Bitcoin ETF being approved by the U.S. securities regulator in the near future, particularly by February 2024.
For those unaware, the Depository Trust & Clearing Corporation is a U.S.-based post-trade financial services company that provides clearing and settlement services to financial markets.
Fidelity’s Application for a Spot Bitcoin ETF
Among a few financial giants like BlackRock, Fidelity is also waiting for the U.S. SEC to approve its spot Bitcoin ETF. The SEC has a small window of opportunity to approve ETFs between January 6-10, 2024. However, the U.S. securities regulator still has the option to postpone applications citing technical reasons.
Experts expect the SEC to give simultaneous approvals to multiple applications at the same time, so as not to give a first-mover advantage to a single company. This could mean that instead of one ETF, collective approval could be given to at least 6-7 out of the 13 ETFs currently waiting for approval.