• Fidelity’s Director of Global Macro, Jurrien Timmer, characterizes Bitcoin as “exponential gold” and emphasizes its potential as a store of value, driven by network growth, scarcity, and market sentiment.
  • Timmer’s analysis suggests a correlation between Bitcoin’s network expansion and price performance, positing its continued rise contingent upon accelerated network growth amidst evolving macroeconomic dynamics.

In a recent analysis, Jurrien Timmer, Fidelity Investments’ Director of Global Macro, has made a compelling case for Bitcoin, likening it to “exponential gold” and positioning it as a promising contender in the store of value arena. Timmer’s insights, shared through several posts on the social media platform X, delve into the unique characteristics driving Bitcoin’s price and its potential future trajectory.

A New Store of Value

Timmer, who specializes in global macro strategy and active asset allocation at Fidelity’s Global Asset Allocation Division, asserts that Bitcoin’s value is primarily influenced by the growth of its network. This network growth is propelled by Bitcoin’s inherent scarcity, the broader monetary and fiscal policy cycles, and overall market sentiment. He stated:

“In my view, bitcoin is exponential gold and an aspiring player on the store of value team.”

Timmer’s analysis includes a detailed chart illustrating Bitcoin’s expanding network along a simple power curve. He explains that the number of non-zero Bitcoin addresses aligns closely with this curve, with Bitcoin’s price oscillating around it in a pendulum-like fashion. This pattern is indicative of Bitcoin’s distinctive series of boom-bust cycles.

Network Growth and Price Dynamics

Timmer noted a recent divergence between Bitcoin’s network growth and its price performance. While the growth of Bitcoin’s network has decelerated, its price continues to rise. This disparity, according to Timmer, might be the reason behind Bitcoin’s recent slowdown in its journey towards new all-time highs. He remarked:

“The growth of Bitcoin’s network has slowed in recent months, while its price has continued to gain.”

Timmer suggests that for Bitcoin to achieve new highs, its network growth must accelerate again. He poses an intriguing question about the future drivers of this growth, pondering whether the next chapter in the fiscal dominance thesis, characterized by monetary subordination, could be the catalyst.

Bitcoin’s future, as seen by Timmer, hinges on the interplay between its network expansion and the broader economic policies that shape market sentiment. As the digital asset continues to mature, its role as a store of value comparable to gold becomes increasingly plausible, underpinned by its unique scarcity and the dynamic forces of adoption and market cycles.

Jurrien Timmer’s perspective underscores Bitcoin’s potential as “exponential gold.” As the digital currency navigates its complex path influenced by network growth and macroeconomic factors, it remains a fascinating asset with the potential to redefine the concept of value in the modern financial landscape.