#Bitcoin #Gold #Cryptocurrency #ETFs #FidelityInvestments #BitcoinHalving #StockToFlow #MonetaryGold
The dynamic rivalry between Bitcoin (BTC) and gold for a slice of the global monetary market has reached a pivotal moment, especially with the recent approval of Bitcoin Exchange-Traded Funds (ETFs). This development potentially positions Bitcoin to challenge gold more closely by matching key metrics that investors consider when allocating their assets. Jurrien Timmer, Fidelity Investments’ Director of Global Macro, offers a compelling analysis in this debate. By evaluating the market capitalization of “monetary gold”—the portion of gold held primarily for financial purposes—and Bitcoin, alongside the effects of Bitcoin halvings on its supply, Timmer presents a thought-provoking perspective on the future interplay between these two assets.
Timmer’s exploration commences with an estimation of monetary gold, proposing that roughly 40% of above-ground gold is held by central banks and private investors, a figure extrapolated from World Gold Council data. He suggests that Bitcoin has the potential to capture about a quarter of the monetary gold market, a sector valued roughly at $6 trillion, with Bitcoin’s market capitalization currently around $1 trillion. Furthermore, Timmer delves into the nuanced impact of Bitcoin halvings, events that historically drive its value upward by reducing the pace of new coin creation. As these halvings continue, their effect may wane due to the decreasing availability of new Bitcoins, leading Timmer to propose a refined projection model for Bitcoin’s price. Incorporating a modified Stock To Flow (S2F) curve that takes into account the diminishing returns of halvings, he forecasts a potential rise in Bitcoin’s price to about $100,000 by the end of 2024. This projection not only signals a significant appreciation in value but also underscores the evolving dynamics of wealth distribution globally, should Bitcoin indeed secure a substantial portion of the monetary gold market.
