FBTC: A Coiled Bitcoin Spring With A Big Bargain

Summary Bitcoin’s resilience amid recent market turmoil suggests a potential rally, with strong support from stabilizing Bitcoin flows and bullish defense levels. Fidelity’s Wise Origin Bitcoin ETF offers superior Bitcoin exposure, competitive fees, and self-custody, making it an attractive investment vehicle. Positive on-chain net flows for spot Bitcoin ETFs, particularly FBTC and ARKB, maintain upward pressure on Bitcoin’s price. Despite global trade tensions, Bitcoin and FBTC show robust performance, reinforcing a Buy rating for FBTC as a top pick for Bitcoin exposure. Investment Thesis Bitcoin ( BTC-USD ), and all crypto assets, are notorious for their outsized volatility. So as markets tanked these past two months, one would expect Bitcoin to get roughed up like it usually would in past corrections and bear markets. But this time around, Bitcoin led crypto markets to stand up against the recent tariff-fueled traumas that plagued markets. The price action that can be seen in Bitcoin and Bitcoin ETFs has been surprisingly encouraging, with Bitcoin performing at par with the markets, as seen below. Exhibit A: Bitcoin and Bitcoin Spot ETFs have kept pace with the markets so far, outperforming QQQ and SMH. (Seeking Alpha) The current relative performance of Bitcoin versus markets stood out from earlier corrections and bear markets since it outperforms ETFs such as Invesco’s QQQ Trust ETF ( QQQ ) and the SPDR Technology Select ETF ( XLK ). In my view, this sort of price action is signaling something to markets-that bulls are vigorously defending these levels, setting up digital assets for a rally by the end of the year. My bullish thesis is supported by the stabilizing levels of Bitcoin flows, which look quite secure even after considering the macro volatility arising from last week’s reciprocal tariff drama. In such conditions, the Fidelity Wise Origin Bitcoin ETF ( FBTC ) continues to be an attractive vehicle for investors to gain exposure to Bitcoin. I am reiterating my bullish outlook on FBTC with a Buy rating. BTC Spot ETF Net Flows Stabilize While FBTC Still Offers Superior Bitcoin Exposure Spot Bitcoin ETFs continue to consolidate on a cumulative basis for the top Bitcoin ETFs after recovering from the outflow cliff that we witnessed in the last week of February this year. The action that I observe in the cumulative on-chain flow remains positive, which signals bulls are adding more capital into ETFs than bears are removing on a net basis, despite the tariff-fueled whipsaw seen in the last couple of weeks. Exhibit B: Spot Bitcoin ETF On-Chain net flows have stabilized since falling off a cliff in February this year. (The Block) The positive trend of on-chain total net flows by spot Bitcoin ETFs is reassuring since it maintains upward pressure on Bitcoin’s price. Among all spot Bitcoin ETFs, I see that Fidelity’s FBTC and Ark 21 Shares’ Bitcoin Trust ETF ( ARKB ) are deploying more capital in buying Bitcoin, as seen in the chart below that tracks the known wallet addresses of spot Bitcoin ETFs. Exhibit C: Fidelity and Ark/21 Shares’ respective Spot Bitcoin ETFs have been increasing their Bitcoin holdings at a faster pace. (The Block) While ARKB has increased its on-chain Bitcoin holdings by 32% already this year to ~62k BTC, FBTC is not far behind with its BTC holdings of 282.3k BTC, which increased 11.4% since the start of the year. Both these funds give investors relatively higher exposure per Bitcoin, which is something I had talked about in my previous coverage on FBTC . But FBTC’s recent on-chain stake raise puts Fidelity’s Bitcoin ETF offering as the second-largest spot Bitcoin ETF to hold Bitcoin, behind BlackRock’s Bitcoin Trust ETF ( IBIT ). Exhibit D: Comparing Fidelity’s FBTC ETF versus other Spot Bitcoin ETFs. (Author’s compilation) Combined with FBTC’s relatively higher exposure to Bitcoin that it offers to investors, as seen in the Bitcoin per share metric, FBTC continues to be relatively cheap and competitive with its fees as compared to other funds. In addition, its biggest draw to many investors is the self-custody of its Bitcoin, which insulates FBTC’s BTC stash from any counterparty risk, unlike most other ETFs that utilize Coinbase’s custodial service for their respective Bitcoin holdings. FBTC clearly still continues to look like a strong candidate to allocate capital to if investors are looking to gain exposure to Bitcoin. At a higher level, my outlook for Bitcoin still remains quite positive despite setbacks seen from the recent tariff turmoil. I recently published a post on Bitcoin last week expressing my bullish outlook for the year, citing examples of positive institutional participation as well as a strong outlook for global liquidity by the end of the year, which could easily see Bitcoin reclaim its 52-week highs. I noted how the Bitcoin was robustly holding up since the market meltdown boiled over since the reciprocal tariff confusion plagues global markets. The consolidation that I noted earlier supports the positive outlook that I have on Bitcoin, which continues to make Bitcoin look attractive at current levels. I believe this is a great opportunity for investors to scale capital allocation to FBTC, which continues to offer superior exposure to Bitcoin. Risks & Other Factors To Note In case the tariff troubles continue to linger and trade tensions persist globally, volatility may spike in Bitcoin. So far, Bitcoin and spot Bitcoin ETFs such as FBTC have performed at par with markets. Risk-averse investors who are looking for more conservative entry points could possibly wait for Bitcoin to reverse course and linger in the $70k-80k price range. One of the key support levels for Bitcoin should be around the $65k-70k support range, which is Bitcoin’s true market mean , an indicator that estimates Bitcoin’s “average market price, considering both historical transactions and the current circulating supply.” Exhibit E: Bitcoin’s price trends versus its true market mean. (Glassnode) Takeaway Bitcoin continues to hold its fort in the face of global uncertainty, indicating a bottom is probably in, and spot Bitcoin ETFs such as FBTC are following through as well with positive price action and strong on-chain Bitcoin holdings. FBTC continues to offer a relatively higher exposure to Bitcoin versus its peers, making FBTC one of my top picks for gaining exposure to Bitcoin. I reiterate my Buy rating on FBTC.

Source: Seeking Alpha