Jurrien Timmer of Fidelity forecasts Bitcoin to reach $1 billion two decades from now, shortly after an earlier $100 million prediction for 2035.
One Bitcoin may be equivalent to $1 billion by 2038, according to Jurrien Timmer, Director of Global Macro at Fidelity. Timmer backed up his assertion with a 4-hour BTC/USD chart that combined the stock-to-flow model with his demand model. In Timmer’s words:
“Metcalfe’s Law holds that, as the number of its users grows linearly, a network’s value (or, by inference, the bitcoin price) grows geometrically.”
The implication is that the utility value of Bitcoin will outgrow its operational network. This operational network encompasses buyers, sellers, exchanges, and ATMs. In addition, it also includes participating retailers, both directly and indirectly, and some leading organizations such as the Dallas Mavericks and AT&T. Rounding out this network are a few insurers, several banks, and a multitude of small businesses.
Timmer’s own demand model grows very slowly in proportion to the stock-to-flow combination supply model. The asset management director’s demand model predicts that BTC will reach $1 million by 2030. On the other hand, the stock-to-flow combination model forecasts a price of between $1 million and $10 million by 2030.
Jurrien Timmer’s demand model seems to historically represent the floor or the bottom of the price. The stock-to-flow model appears to be a better fit for the peak. However, the gap between both models widens significantly after 2030. One of the suggested reasons for the widening gap after 2030 is the change in the value of the dollar. It should be noted, however, that this reasoning is not set in stone.
Bitcoin Could Hit $1 Billion Because of Changes in the Dollar Value
Timmer stated that the value of the dollar changes in relation to other assets. He further pointed out that $1 invested in stocks in the 18th century is worth about $4 billion of today’s money. Going by this assumption, $1 million today could be worth $1 billion in twenty years’ time.
Changes in the dollar’s value, especially depreciation over several decades, render the same amount with less purchasing power. This is why huge sums back then appear less by today’s standards. For instance, $1 million could purchase a lot of significant things a few decades ago. To put this in perspective, reasonably higher-end houses in the US cost between $20,000 and $50,000. The same $1 million may not suffice for the same class of houses today.
There is an increasing number of billionaires across the globe today. Some observers even believe that we may see the first trillionaire in this lifetime. The same applies to organizations, with several companies now passing the $1 trillion market cap valuation.
Fidelity had previously pegged BTC to hit $100 million by 2035 using the same stock-to-flow model. Jurrien Timmer also made those predictions back then. As untested and uncertain Timmer’s predictions are, he is not the only one with such lofty forecasts. Deutsche Bank also forecasts that Bitcoin will dominate by 2030.