‘Bitcoin is Exponential Gold’, says Fidelity’s Director of Global Macro
Jurrien Timmer, Fidelity’s Director of Global Macro, recently made a remarkable statement about Bitcoin, describing it as “virtual gold” and an emerging player in the “store of value” group. Timmer’s comments were shared in a series of posts, in which he elaborated on Bitcoin’s evolving role in the financial ecosystem.
In my opinion, bitcoin is virtual gold and a desirable player in the store of value group. My work suggests that the price of bitcoin is primarily driven by the growth of its network, which in turn is driven by the unique feature of bitcoin’s scarcity, as well as funds and funds…
— Jurrien Timmer (@TimmerFidelity) June 13, 2024
Timmer highlighted Bitcoin’s unique position in the market, and compared its growth trajectory to growth curves seen in technologies such as the Internet and mobile phones. He emphasized that Bitcoin’s scarcity and growing acceptance as a digital asset contributes to its potential as a long-term store of value, similar to gold.
Jurrien Timmer
In his posts, Timmer suggested that its acquisition rate and network growth are key factors in its rating. He noted that although Bitcoin is still in its early stages compared to traditional assets, its adoption is growing at a rapid pace, supporting the idea that Bitcoin could become a significant store of value in the future.
“The chart below shows the growing Bitcoin network along a simple power curve. The number of non-zero addresses clustered on this power curve, the price of Bitcoin swings like a pendulum,” he said. “That’s Bitcoin’s unique series of boom-bust cycles.”
Jurrien Timmer
Timmer’s endorsement is in line with a broader trend among institutional investors who recognize the potential of Bitcoin. His opinion reinforces the growing legitimacy of Bitcoin within the financial industry, suggesting that it could play an important role in investment strategies in the future.
“The growth of the Bitcoin network has slowed down in recent months, while its price has continued to gain,” he concluded. “In my opinion, this divergence between price and discovery can explain why Bitcoin has slowed down a bit on its way to a potential new high. The pendulum will only swing so far. For the new high to continue, the network may have to accelerate again.”
