By
Kseniia Klichova
May 3rd, 2024
With Bitcoin’s current market capitalization standing at over $1 trillion, Timmer’s projection implies a substantial growth potential for the leading cryptocurrency.
Jurrien Timmer, Fidelity’s Director of Global Macro, recently made a bold prediction regarding Bitcoin’s (BTC) market capitalization, suggesting it could potentially hit $6 trillion, equivalent to a quarter of the “monetary gold” market. This projection hinges on Bitcoin’s course towards solidifying its position as digital gold and a reliable store of value.
Timmer’s Forecast: Bitcoin’s Market Cap and Gold Comparison
Timmer’s analysis is grounded in the comparison between Bitcoin and gold, two assets often considered as stores of value. He highlighted Bitcoin’s potential to capture a substantial share of the monetary gold market, estimated at 40% of the world’s above-ground gold.
He cited Bitcoin’s scarcity and increasing acceptance as a hedge against inflation and currency devaluation. With Bitcoin’s current market capitalization standing at over $1 trillion, Timmer’s projection implies a substantial growth potential for the leading cryptocurrency.
Following up on my previous threads, here are some thoughts on Bitcoin’s potential market share vs gold: In the chart below I show the value of “monetary gold,” which is that share of gold held by central banks and private investors as a monetary asset (as opposed to jewelry or… pic.twitter.com/ZFJ3zHE4ka
— Jurrien Timmer (@TimmerFidelity) February 22, 2024
Currently valued at around $6 trillion, monetary gold, excluding jewelry or industrial uses, is predominantly held by Central Banks and private investors. Timmer argues that Bitcoin, with its current $1 trillion valuation, could capture a substantial share of this market, leveraging its inherent characteristics and growing acceptance.
While some investors view Timmer’s forecast as a credible base case model, others express differing opinions. “It is hard to verify that ‘your’ gold is real, whether you hold it via proxy or by yourself. Not even talking about transportation, and holding costs. You are more and more bullish on Bitcoin, and a $2.5 – $3 market cap is a decent estimate,” one X user wrote.
To evaluate Timmer’s forecast, it’s crucial to examine the fundamental attributes of Bitcoin that align it with gold’s monetary role. These include its scarcity resulting from a limited supply and its increasing recognition as a hedge against inflation and currency devaluation. Additionally, Bitcoin’s decentralized architecture distinguishes it as a modern alternative to gold, attracting a younger generation of investors.
Bullish Projections on Bitcoin
Notably, MicroStrategy’s Executive Chairman and Co-founder, Michael Saylor, echoes optimism regarding Bitcoin’s future growth. Saylor argues that Bitcoin’s structure can accommodate more capital and surpass top companies like Apple Inc (NASDAQ: AAPL), especially with the recent introduction of US Spot Bitcoin Exchange Traded Funds (ETFs).
He emphasizes Bitcoin’s status as the ultimate asset class winner and suggests that the cryptocurrency’s only competitors are traditional stores of value like the S&P 500, gold, and real estate. However, it is worth mentioning that in 2023, Bitcoin outpaced the S&P 500 and Gold by more than 90%.
Similarly, industry experts like Tom Lee, the head of research at Fundstrat Global Advisors, foresee a bullish outlook for Bitcoin’s performance. Lee believes that factors such as the introduction of Bitcoin ETFs and supply constraints due to halving could drive Bitcoin to reach new highs, potentially surpassing $150,000 in value.
Overall, Timmer’s forecast of Bitcoin reaching a $6 trillion market cap presents a compelling outlook for the cryptocurrency’s course. As Bitcoin continues to solidify its position as digital gold and gain traction among investors, the potential for further growth remains promising.