Fidelity Predicts $1 Billion Bitcoin
Investing giant goes all in on crypto space
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$1,000,000,000. A lot of zeroes. In 2021, a billion dollars seems like a lot of money. Even in 2038, it will be a lot of money. Jurrien Timmer, Director of Global Macro at Fidelity Investments, believes that one Bitcoin could be worth $1 billion by the year 2038.
Timmer also believes that the orange coin could hit $1 million before this decade is over. That’s only eight years from now, and would represent a 20x multiple of Bitcoin’s current market price of around $48,000. I know. Anyone can make predictions like that. But Timmer lays out his case using his own valuation model and another well known model, the Stock to Flow model.
Timmer’s demand model is based upon Metcalfe’s Law. Metcalfe holds that as the number of users of a network grows linearly, the value of the network grows exponentially. Thus, if the number of users doubled, its value would grow at four times, or the square of two. Timmer’s demand model grows steadily to about $1 million by the year 2030.
By contrast, the Stock to Flow model, created by the pseudonymous analyst that goes simply by Plan B, is based on the supply of new coins growing at a decreasing rate each year. This occurs because of the built-in halvenings every four years. Given increases in adoption and demand, the result will be prices expanding exponentially. Indeed, the price of Bitcoin has grown at approximately 10x every four years, not by just the 50% slowdown in supply. Pretty powerful stuff.
Stock to Flow predicts even faster growth in price than does Timmer’s Demand Model, especially after the year 2030.
https://twitter.com/100trillionUSD/status/1434574191970357248
Timmer’s Reason’s for the Bold Prediction:
- The devaluation and unraveling of the current fiat monetary system.
