Jurrien Timmer, Director of Global Macro at Fidelity Investments, continues to provide insightful frameworks for understanding Bitcoin’s valuation and growth. In one recent updateTimmer shared his views on Bitcoin’s adoption and value trajectories, illustrated by detailed charts that reflect both historical trends and hypothetical scenarios.
Timmer’s models aim to simplify Bitcoin’s complex growth dynamics and bridge the gap between network adoption and appreciation. “While supply is known, demand is not,” he said, emphasizing the crucial role of adoption curves and macroeconomic variables such as real interest rates and monetary policy.
Adoption curves: slowing but consistent growth
Despite a slowdown in Bitcoin’s network growth, 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. Although the internet adoption curve has a gentler slope, Bitcoin’s adoption trajectory remains steeper, indicating its rapid but mature growth.
Importantly, Timmer highlighted a key limitation in measuring wallet growth: the subdued number of wallets/addresses due to Bitcoin ETFs, which consolidate assets into just a few wallets. “It is very likely that the number of wallets and addresses is too low,” he said, noting that ETFs are obscuring the broader spread of Bitcoin adoption.
Monetary policy meets adoption dynamics
Building on his previous models, Timmer added a new layer to his valuation framework by integrating the growth of the money supply in addition to the real interest rate. The updated charts compare two hypothetical paths for Bitcoin’s appreciation: one driven by adoption curves and real interest rates, and another that factors in monetary inflation.
“Again, these are not predictions,” Timmer clarified, “but merely attempts to visualize the use case based on adoption, real interest rates and monetary inflation.” This layered approach underlines how external macroeconomic forces, such as monetary policy, can influence Bitcoin adoption and valuation.
Why this matters
Timmer’s updated models strengthen Bitcoin’s position as a declining financial asset. Combining historical S-curves, Metcalfe’s law, and macroeconomic factors, he provides a comprehensive view of Bitcoin’s unique mix of network utility and monetary characteristics. His work highlights the importance of adoption in increasing Bitcoin’s value, while also showing how real-world monetary conditions could shape its future.
For Bitcoin proponents and skeptics alike, Timmer’s insights serve as a valuable framework for understanding the dual nature of the asset as both a network and a form of money. The inclusion of monetary inflation in its models further underlines Bitcoin’s potential as a hedge against the devaluation of the fiat currency.
The way forward
As Bitcoin continues to evolve, Timmer’s models provide a critical lens to monitor its development. Whether it’s the flattening of the adoption curve or the interplay between monetary policy and valuation, his analysis underlines 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.