Bitcoin Targets Quarter of Gold Market in $500B Surge: Fidelity

1. Fidelity’s Jurrien Timmer predicts a $500 billion increase in Bitcoin’s total value, aiming for $1.5 trillion.

– A rise in the market, with a total value exceeding $1 trillion and further growth anticipated.

– Stock-to-flow model used to illustrate Bitcoin’s scarcity and value compared to gold.

Fidelity’s Jurrien Timmer forecasts Bitcoin’s total value to rise by $500 billion. On reaching $1.5 trillion, potentially seizing a quarter of the monetary gold market.

Often likened to gold due to similarities in scarcity and store of value, Bitcoin is gaining traction in the market, with its $1 trillion total value expected to surge further.

Jurrien Timmer bases his analysis on a variation of the stock-to-flow model, a tool typically used in commodities markets. This model measures the current stock of a commodity against the flow of new production.

Bitcoin’s Potential in Comparison to Gold

The Fidelity executive estimates that Bitcoin could capture around 25% of the monetary gold market, valued at approximately $6 trillion, held by central banks, financial institutions, and governments.

On February 14, Bitcoin surpassed the $1 trillion mark, sparking speculation on its trajectory over the next 18 months. Skybridge Capital founder Anthony Scaramucci had earlier predicted Bitcoin’s total value reaching half that of gold.

While Timmer’s analysis relies on the stock-to-flow model, critics argue that the model may not fully account for changes in Bitcoin’s market dynamics, such as investor sentiment and regulatory shifts.

Bitcoin and Gold Correlation

Despite being compared to gold, Bitcoin and gold rarely trade in tandem. Bitcoin’s correlation leans towards riskier assets like the Nasdaq, while gold’s movements align with market skittishness.

In the current market landscape, gold has experienced a 2% decrease this year, while Bitcoin and the Nasdaq have risen by 16% and 8.6%, respectively.

Bitcoin’s Future Beyond 21 Million Cap

As Bitcoin approaches its 21 million cap, Timmer notes that while its growth aligns with the stock-to-flow model, the model’s applicability may diminish once new coin production ceases.

Despite debates on the accuracy of models, Timmer’s projection adds to the ongoing dialogue about Bitcoin’s potential to reshape the financial landscape and compete with traditional stores of value.