- Jurrien Timmer highlighted that Bitcoin (BTC) has the potential to disrupt the commodity global industry as it has value and is highly sought after to hedge against monetary debasement.
- While gold has been used over the years to store value, Timmer highlighted that it has failed to be used as a medium of exchange, an area where Bitcoin has excelled.
After a detailed consideration, Jurrien Timmer, the director of global macro at Fidelity Investments, has highlighted that Bitcoin (BTC) has the potential to dethrone Gold’s market capitalization with the narrative of digital store of value.
Timmer noted in a series of tweets that Bitcoin price has been following the previous cycles separated by the programmed halving event.
Consequently, Timmer concluded that Bitcoin price is likely to revisit its all-time high in the next two years and possibly rally beyond $100k. Moreover, Bitcoin price has been following an exponential plane that can be extrapolated including the diminishing returns factor.
Bitcoin is on the move again (following the pattern of previous boom-bust cycles, so far). What to make of it? Let’s revisit my thesis from late 2020:
pic.twitter.com/gNFtbOScr2
— Jurrien Timmer (@TimmerFidelity) November 1, 2023
Market Picture of the Bitcoin vs Gold Narrative
According to Timmer, gold has done well historically during economic hardships that are described by high inflation with examples of the 1970s and 2000s. With Bitcoin having outshined gold in performance in the past fifteen years, Timmer insinuated that the former is about to enter a mega-bullish phase fueled by institutional investors.
Moreover, more than ten hedge funds in the United States – led by Grayscale Investments, and BlackRock Inc. – have applied to offer spot Bitcoin exchange-traded funds (ETF), which invest directly into Bitcoin compared to futures ETFs.
According to market estimates provided by the World Gold Council, the total gold market value is about $12 trillion, whereby jewelry makes up the majority while the physical financial fold makes up about 40 percent. Since 2020, gold price has struggled to rally above $2k comfortably, whereas Bitcoin price has rallied more than 300 percent considering the 2022 bear market. With the recent Bitcoin price breakout above $32k, it will be an easy time ahead to overtake gold amid mainstream adoption.
Way of Crypto
Fidelity Investments entered the cryptocurrency market back in 2014, when it began mining Bitcoin and later in 2018 through Fidelity Digital Assets, an institutional custody and trading platform for digital assets, the firm further ventured into the DeFi industry. In the United States, Fidelity Investments has applied to offer spot Bitcoin ETF, which analysts believe will have the same effects as the gold ETF in 2006 that resulted in an exponential rally.
According to Mathew Hougan, the Chief Executive Officer at Bitwise Investments, the approval of spot Bitcoin ETF will pull in around $55 billion during the first five years, whereby the forecast was based on how the demand evolved on Canada’s spot Bitcoin ETF.
However, some experts led by the Boston Consulting Group have argued that the rate of cash inflow to spot Bitcoin ETF could be much higher since the pension funds and other money managers amounting to around $46.5 trillion will be absorbed.
