Jurian Timmer, Global Macro Director at Fidelity, recently made a notable statement about Bitcoin, calling it “exponential gold” and an emerging player in the “store of value” team. Timmer's comments were shared through a series of posts, where he explained Bitcoin's evolving role in the financial ecosystem.
In my view, Bitcoin is a massive gold and an aspirational player in the Store of Value team. My work suggests that Bitcoin's price is primarily driven by growth in its network, which in turn is driven by Bitcoin's unique scarcity feature, as well as monetary and financial factors.
– Joren Timmer (@TimmerFidelity) June 13, 2024
Timmer highlighted Bitcoin's unique position in the market, comparing its growth trajectory to the exponential adoption curves seen in technologies such as the Internet and mobile phones. He stressed that Bitcoin's scarcity and growing acceptance as a digital asset contribute to its potential as a long-term store of value, similar to gold.
In his posts, Timmer suggested that its adoption rate and network growth are critical factors in its evaluation. He noted that although Bitcoin is still in its infancy compared to traditional assets, its adoption is accelerating at an exponential rate, supporting the hypothesis that Bitcoin could become an important store of value in the future.
“The chart below shows the Bitcoin network growing along a simple power curve. The number of non-zero addresses has converged toward this power curve, with the price of Bitcoin swinging around it like a pendulum,” he said. “This is Bitcoin's unique series of boom and bust cycles.”
Timmer's endorsement is in line with the broader trend among institutional investors who recognize Bitcoin's potential. He reinforces his view of the increasing legitimacy of Bitcoin within the financial industry, suggesting that it could play a vital role in future investment strategies.
“Bitcoin network growth has slowed in recent months, while its price has continued to rise,” he concluded. “In my view, this divergence between price and adoption could explain why Bitcoin has slowed down a bit along its path to potential new all-time highs. The pendulum will only swing so far. For the new highs to continue, the network may need to speed up again.” “