Jurrien Timmer, Director of Global Macro at Fidelity Investments, continues to provide insightful fundamentals for understanding Bitcoin’s value and growth. A last updateTimmer shared his thoughts on Bitcoin’s adoption and value trajectories, illustrated with detailed charts depicting both historical trends and hypothetical scenarios.
Timmer’s models aim to simplify Bitcoin’s complex growth dynamics, bridging the gap between network adoption and valuation. “While supply is known, demand is not,” he said, emphasizing the important role of supply curves and macroeconomic variables such as real exchange rates and monetary policy.
Adoption Curve: Slow but steady growth
Despite the slowdown in the growth of the Bitcoin network, as measured by the number of wallets with non-zero balances, Timmer noted that the trend is still in line with the steep power curve shown in his updated adoption chart. While the Internet’s adoption curve has a gentle slope, Bitcoin’s adoption trajectory remains steep, indicating its rapid but mature growth.
Most importantly, Timmer highlighted a major limitation in measuring wallet growth: the smaller number of wallets/addresses due to Bitcoin ETFs that aggregate holdings across multiple wallets. “This wallet/address count may be underrepresented,” he said, adding that ETFs mask the widespread adoption of Bitcoin.
Monetary policy responds to the dynamics of acceptance
Building on his earlier models, Timmer added a new layer to the estimation system by incorporating growth in the money supply alongside real interest rates. The updated charts compare two hypothetical ways of valuing Bitcoin: one driven by adoption curves and real rates, and one that includes currency inflation as a factor.
“Again, these are not predictions,” Timmer explained, “just an attempt to visualize the use case based on adoption, real rates and monetary inflation.” This layered approach highlights how external macroeconomic forces, such as monetary policy, can affect the adoption and valuation of Bitcoin.
Why is this important?
Timmer’s updated models reinforce Bitcoin’s position as a mature financial asset. Combining historical S-curves, Metcalf’s Law, and macroeconomic factors, it offers a comprehensive view of Bitcoin’s unique blend of network utility and monetary features. His work highlights the importance of adoption in driving Bitcoin’s value, while also showing how real-world monetary conditions can shape its future.
For Bitcoin supporters and skeptics alike, Timmer’s insights serve as a valuable framework for understanding the asset’s dual nature as a network and a form of money. The addition of monetary inflation to its models further underscores Bitcoin’s potential as a hedge against falling fiat currencies.
The Road Ahead
As Bitcoin evolves, Timmer’s models provide an important lens through which to track its development. Whether it is the flattening of the acceptance curve or the interplay between monetary policy and valuation, his analysis underscores the growing complexity of the asset and its continued relevance in the financial world.
For investors, analysts, and enthusiasts, these insights are a reminder of Bitcoin’s transformative potential even as its growth curve matures.
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