According to Jurrien Timmer, the Director of Global Macro at Fidelity, a leading digital asset investment firm, Bitcoin can tap into the monetary market of gold. In a series of posts shared to X, formerly Twitter, the Fidelity’s executive detailed his thoughts on Bitcoin’s potential market share vs gold.

Sharing a recent chart depicting the value of monetary gold, share of gold held by central banks and private investors as a monetary asset (as opposed to jewellery or industrial uses).

Estimating that the share of monetary gold is around 40% of total above-ground gold, the Fidelity executive is convinced that Bitcoin will “eventually capture around a quarter of the monetary gold market.” He added, “At 40%, monetary gold is currently worth around $6 trillion, while Bitcoin is worth $1 trillion.”

Historically, Bitcoin’s market position has been consistently compared to that of gold. Institutional players have previously branded Bitcoin as digital gold.

Interestingly, Bitcoin has outperformed gold on previous occasions. Last year, Bitcoin recorded a 50% spike in value, beating the broader stock market, including gold trading 47% below Bitcoin’s value.

In 2023, Bitcoin outperformed Gold by 10x, and this bullish performance is setting the tone for 2024, with market experts being largely positive. 

Jurrien Timmer: Future Bitcoin halving will not have a strong impact on the asset’s price

Regarding the next Bitcoin halving, Timmer shared another chart that illustrates what he expects to be diminishing returns from future halving.

While the Bitcoin halving in 2012 resulted in a decrease in supply from 2.7 million to 1.3 million, and the Bitcoin halving in 2016 took supply from 1.3 million to 656 thousand, Timmer is certain that the upcoming halving will not have as much impact on price as previous halvings did, particularly when incremental supply goes from 160 coins to 80 to 40.

As he further explained;

“In 2012 Bitcoin’s outstanding supply was 50% of its eventual supply, in 2016 it was 75%, and in 2070 it will be 99.9977%. It’s easy to imagine the power of a halving in 2016. It seems unlikely to me that future halvings will be as impactful when there are fewer coins to mine.

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Filed under: Bitcoin - @ March 1, 2024 6:01 pm