Summary
Fidelity Digital Assets has changed its medium-term outlook on Bitcoin from positive to neutral due to concerning trends in Bitcoin’s market performance. The shift is based on analysis of the Bitcoin Yardstick and increased sell pressure from long-term holders. However, Fidelity remains positive in the short term and notes ongoing accumulation by smaller investors. Exchange balances have declined as more investors opt for self-custody. Bitcoin’s price has fluctuated between $60,000 and $71,800 after a sharp correction from an all-time high of $73,777.
Key Points
1. Fidelity Digital Assets has revised its medium-term outlook on Bitcoin from positive to neutral, citing concerning trends in Bitcoin’s market performance.
2. The Bitcoin Yardstick, which compares Bitcoin’s total market cap to its hash rate, has shown that Bitcoin has not been deemed “cheap” throughout Q1, with values above two deviations signaling potential overvaluation.
3. Despite the neutral medium-term outlook, Fidelity maintains a positive view in the short term, citing ongoing accumulation by smaller investors and a growing distribution of Bitcoin among the average person.