Summary Fidelity Wise Origin Bitcoin Fund ETF benefits from fiat currency concerns, dovish central banks, and lower rates, driving strong medium- and long-term prospects. FBTC is supported by increasing institutional adoption, friendlier regulation, and the potential for future central bank Bitcoin holdings. While Bitcoin remains volatile, dips—especially near previous lows—are considered attractive buying opportunities for FBTC investors. Precious metals have been grabbing most of the headlines in recent months as they surge higher, but it's also been a solid year for Bitcoin and the Fidelity Wise Origin Bitcoin Fund ETF ( FBTC ), which made a new all-time high in October. This article looks at why Bitcoin and FBTC should continue higher over the medium and long term as several powerful drivers align. 1. Fiat Concerns, Dovish Banks and Lower Rates My last article on FBTC was published back in May and titled " Breaking Out On Fiat Fears. " To summarize, Moody's had just downgraded the US credit rating, further eroding trust in the US dollar. This ignited a strong move in FBTC to all-time highs, as Bitcoin is an alternative to fiat currency. Since then, the situation for the US dollar and for other global currencies has worsened. President Trump's "Big Beautiful Bill" passed and is set to deepen fiscal deficits, at least over the next few years, until the US government can grow its finances sufficiently (an optimistic view). More recently, the Fed shifted dovishly and resumed its cutting cycle. A cut in September initially led to a brief drop in Bitcoin, but it has since recovered and made new all-time highs in October. More cuts are on the way, with 25 bps in September nearly fully priced, 25bps in December around 80% likely according to the CME FedWatch tool . That may just be the start. We now have Trump pick Steve Miran as a new governor, and he is advocating for aggressive cuts towards the low 2% area. That is around 2% lower. And when current Chair Powell is replaced in May, he will almost certainly be replaced by a dove to guide rates towards this goal. The dovish shift in the Fed highlights that the Fed will ease at the slightest hint of economic weakness. They have framed the shift as "risk management," but unemployment of 4.3% is not necessarily a level to make a series of cuts, especially when inflation is on the rise. Trading Economics The apparent abandonment of the inflation side of the Fed's mandate is particularly positive for FBTC. Bitcoin is considered an inflation hedge. Furthermore, the divisions in the Fed (the recent meeting had very divided opinions on where rates should be in December) and the upcoming Chair change could lead to a muddled policy. I already think the Fed may be making a policy mistake by cutting aggressively just when inflation is a risk again. Taken together, the rate cuts, the rise in inflation, and the lack of cohesion at the Fed all spell trouble for the US dollar and make alternative currencies more attractive. And, of course, Bitcoin is a global asset, and global currencies have their own domestic negatives. The ECB has cut 8 times, and just look at the Swiss National Bank, which has cut back to 0% and has nowhere to go but negative rates again. If the US economy should finally fall back into a recession, the Fed could do the same. In any case, the trend is clear: rates are heading lower. MacroMicro Lower rates make alternative assets like Bitcoin and gold more attractive. If yields are at 5%, bonds may be considered a safe place to park some cash and earn modest interest. If yields are 2%, bonds are no longer keeping up with inflation, and the investment no longer makes sense. The money is forced to look elsewhere. 2. Powerful Support It's becoming easier to buy and own crypto, thanks to the launch of ETFs like FBTC and deregulation. The Trump administration is crypto-friendly and swiftly pushed through the CLARITY Act, the GENIUS Act and established a federal "Strategic Bitcoin Reserve." The latter stopped short of actually buying crypto, but it may be a matter of time. Earlier this week, Deutsche Bank suggested central banks will end up holding Bitcoin : A strategic Bitcoin allocation could emerge as a modern cornerstone of financial security, echoing gold’s role in the 20th century. Assessing volatility, liquidity, strategic value and trust, we find that both assets will likely feature on central bank balance sheets by 2030. Central banks are not buying right now, but the prospect of this in the future is a reason to be optimistic. We only have to look at gold's move in 2024 and 2025 to see what central bank buying can do. In the meantime, FBTC can benefit from the institutional rush to buy. With a friendlier regulatory environment under the Trump administration, nearly 60% of institutional investors plan to boost their crypto allocation in the coming year, and average exposure is expected to more than double within three years, according to State Street's annual digital assets and emerging technology survey released on Thursday. Institutions are late to the crypto party and are underinvested. State Street continued, The average portfolio allocation across a range of digital assets stood at 7%, the survey found, and that's expected to jump to 16% by 2028. This will be powerful support. Indeed, Bitcoin has a lot of powerful supporters. Indian Times With strong institutional buying, the potential for central bank buying, and the President of the US on your side, the long-term outlook looks positive. FBTC Basics FBTC has been somewhat eclipsed by the iShares Bitcoin Trust ETF ( IBIT ), which has grown its AUM to $97B. Data by YCharts This isn't necessarily a reflection of better quality. There is almost no difference between the two funds. They both have an expense ratio of 0.25% and the returns are almost identical. Data by YCharts I think it may have something to do with BlackRock's iShares series being more visible and well-known. When given the choice between two brands, most people choose the one they know best. One consideration is that FBTC and IBIT have different custodians, and Fidelity is a self-custodian. If you are worried about safety, it may be wise to spread assets between both funds. Risks Bitcoin is a volatile asset and has experienced several major bear markets in the last decade. The last one was in 2021-2022 when Bitcoin dropped 77%. While the outlook in 2025 looks better than it was in 2021, another large drop can't be ruled out. I would be particularly careful if the trend from the 2022 low breaks. TradingView The 2021 highs around $65,000 might be tested in a major bear market, but I am doubtful any drop would get this far, and I would view it as a great buying opportunity. Conclusions 2025 has been a great year for crypto, Bitcoin and FBTC. The downgrade to US government debt and the dovish shift by the Fed, despite the backdrop of rising inflation, make Bitcoin attractive compared to fiat-backed assets. Furthermore, deregulation and a supportive President have led to an institutional rush to buy. At some point, central banks may join the buying frenzy. The FBTC outlook for the long term, therefore, looks better than ever as powerful drivers align. That doesn't mean the path higher will be smooth, but it does mean that dips should be considered buying opportunities.
