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Charles Edwards, founder of Capriole Investments, sees a bullish outlook for Bitcoin BTC/USD driven by improving macro conditions and the impact of spot ETFs.

What Happened: In an interview on the Blockworks Macro podcast, Edwards highlighted that the market is at "the exact opposite point" of November 2021, when the Fed began aggressive rate hikes.

Edwards pointed to several bullish indicators, including Bitcoin’s strong correlation with US liquidity measures and gold’s recent breakout to new highs. “Bitcoin tends to lag gold by a few months,” he highlighted, suggesting Bitcoin could follow gold’s upward trajectory.

While Bitcoin has underperformed recently, Edwards attributes this to idiosyncratic factors like Mt. Gox-related selling pressure. He believes these headwinds are largely behind us, setting the stage for potential gains.

For market signals, Edwards will be closely watching Fed policy shifts and normalized on-chain metrics in the coming months. He concludes: "I think the downside is, at least in the near term, pretty capped."

At a recent appearance, Federal Reserve Chairman Jerome Powell said that future interest rate cuts would depend on economic data.

He added that the inflation is on a sustainable path back to 2%, and the recent 50-basis point rate cut shows growing confidence in the goal. Regarding any future rate cuts, he said it can happen slower or faster depending on how the economy moves and reacts.

Why It Matters:Edwards remains optimistic about spot Bitcoin ETFs, comparing their potential impact to gold ETFs launched in 2004. However, he cautions that on-chain metrics have become less reliable due to the shift of Bitcoin into ETFs, stating: "I now think that’s not really so relevant because of what I’m about to talk about with ETFs."

Recent statistics indicate remarkable inflows of $20.9 billion into iShares Bitcoin Trust IBIT this year, accounting for a whopping 98.63% of its Assets under management.

Looking ahead, Edwards sees central banks potentially holding Bitcoin alongside gold within 5-10 years. He notes: "The way that central banks hold gold today, they will at least be holding some Bitcoin."

What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

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