Arca’s Jeff Dorman: Market’s Fixation on Bitcoin ETF is Because 2023 is Boring

While bitcoin today jumped more than 7% on a positive ruling regarding Grayscale’s attempt to convert its Grayscale Bitcoin Trust (GBTC) into a spot bitcoin ETF, Jeff Dorman, Chief Investment Officer at Arca, says the world’s largest digital asset will need a “significant catalyst” to break out of its range-bound ways.

“When you get positive ETF news, whether it's Grayscale winning their lawsuit with the SEC or an actual approval of one of the many outstanding Bitcoin ETFs, you will definitely get a move higher in price," he said during a recent interview with CoinDesk TV.

However, he warned that it's "premature" to anticipate this as a magic bullet for sustained growth, emphasizing that the "real follow-through only happens once BlackRock and others start to really market bitcoin in their documents."

"If you're looking for a short-term move in bitcoin, it's probably going to be if we start to see rates start to go back down or inflation going back up, and therefore real rates going down," Dorman said.

Bitcoin, he argues, "really just tracked real rates" for much of the past year and a half, highlighting that this correlation becomes particularly important when real rates start to rise.

Dorman pointed out that for most of the year – which has been otherwise dull for digital asset investors – bitcoin has acted as a “call option on future problems with confidence in your local governments and banks.”

“During periods like in March, when there was a big loss of confidence in regional banks in the US, that was a real boon to Bitcoin's price," he said.

The big question is, what will be that next market-moving sentiment?