The Director of World Macro at Fidelity Investments, Jurrien Timmer, lately offered insights into the potential of the flagship cryptocurrency, Bitcoin, and went so far as labeling the crypto token as “exponential gold.”
A Look At Bitcoin’s Adoption Curve
In a post launched on his X (previously Twitter) platform, Timmer talked about that Bitcoin’s shortage and adoption curve doubtlessly permit it to be a “high-powered hedge towards financial shenanigans,” possible alluding to the truth that the token’s options make it an incredible choice to hedge against inflation. That’s the reason he sees the token as “exponential gold.”
He additional elaborated on Bitcoin’s adoption curve, stating that it has thus far adopted a “typical S-curve form,” which locations it in good firm with different main improvements that went by way of such an adoption journey. One in every of them is cellphones, as Timmer famous that Bitcoin’s adoption curve in 2020 resembled that of cellphones within the ‘80s and ‘90s.
Bitcoin, nonetheless, appears to have moved to a different stage within the adoption curve, as Timmer acknowledged that the “real-rate narrative modified from dovish in 2020 to hawkish in 2022.” He additional instructed that Bitcoin has moved previous the stage of a fast rise as its adoption curve has flattened out. With this, Timmer believes that it now shares similarities with the adoption curve of the internet within the 2000s because the crypto token “has not made a lot progress since 2021.”
Bitcoin Volatility: Good Or Unhealthy?
In a subsequent post, Timmer put Bitcoin’s volatility in perspective as he in contrast it with different asset courses. First, he shared a risk-reward chart for the pandemic and post-pandemic period starting from 2020 to this yr. The SPX appeared to offer the most effective risk-reward with near 24% return.
Timmer then went on to share one other chart, which included Bitcoin this time round. The foremost cryptocurrency notably stood out from the remaining, as he talked about that Bitcoin was “in a unique universe,” with a 58% return.
Bitcoin’s high volatility appears to have contributed to such returns in no small approach, as Timmer talked about that the crypto token’s large drawdowns additionally include giant features. To drive residence his level, he shared one other chart that confirmed drawdowns and rallies, which varied asset courses have skilled from their 2-year excessive and low, respectively.
The chart confirmed that Bitcoin skilled a 54% drawdown from its two-year high however can be up by 84% from its low in the identical interval.
That is extra spectacular when one considers how different asset courses have fared in the identical interval as Timmer acknowledged that Government bonds “can’t maintain a candle” to Bitcoin’s risk-reward math.
BTC jumps again to $34,800 | Supply: BTCUSD on Tradingview.com
Featured picture from Capital.com, chart from Tradingview.com