Fidelity Director: Bitcoin Market Cap Could Reach $6 Trillion, a Quarter of ‘Monetary Gold’ Market

Fidelity’s Director of Global Macro, Jurrien Timmer, has suggested that the Bitcoin (BTC) market cap has the potential to reach a quarter of the “monetary gold” market, hitting an impressive $6 trillion. Jurrien Timmer’s forecast is based on the assumption that Bitcoin will solidify its position as digital gold and a reliable store of value.Timmer’s analysis, shared in a Thursday post on X, draws a parallel between the portion of gold held for monetary purposes, estimated at 40% of the world’s above-ground gold, and the potential market value of Bitcoin. 

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

Bitcoin’s Market Cap Could Grow to $6 Trillion: Timmer

Jurrien Timmer noted that the monetary gold, excluding jewelry or industrial uses, is currently valued at around $6 trillion, with central banks and private investors holding this significant share. The Fidelity Director argued that Bitcoin could capture a substantial slice of this market, leveraging its current valuation of $1 trillion as a foundation for further growth.“I estimate that Bitcoin will eventually capture around a quarter of the monetary gold market,” he wrote. “At 40%, monetary gold is currently worth around $6 trillion, while Bitcoin is worth $1 trillion.”To assess the credibility of Timmer’s forecast, it is important to consider the inherent characteristics of Bitcoin that align it with gold’s monetary role. These include the scarcity resulting from its limited supply and its increasing acceptance as a hedge against inflation and currency devaluation. Furthermore, Bitcoin’s digital nature and decentralized framework position it as a modern alternative to gold, particularly appealing to tech-savvy individuals and a younger demographic of investors.Meanwhile, some users claimed that Timmer’s analysis is a good base case model for valuing Bitcoin but the leading cryptocurrency has the potential to grow even more in terms of market value. “Demand for gold is globally on nation state level, however Bitcoin demand is growing from ‘bottom up’, people were first to adopt is not nations,” one user wrote. 

This analysis is entirely focused on the supply dynamics, but I have posted a lot of content using demand factors (S-curves, etc).

— Jurrien Timmer (@TimmerFidelity) February 22, 2024

Analysts Remain Bullish on Bitcoin

As reported, a new report from Matrixport predicts that Bitcoin could reach a target of $63,000 by March 2024. In its report, Matrixport identified some key catalysts that could propel Bitcoin to new heights, including the recent approval of spot Bitcoin ETFs, the upcoming halving event, and interest rate cuts. Bitwise Chief Investment Officer Matt Hougan also expects Bitcoin to soar beyond $80,000 this year thanks to the recent success of spot ETFs.In a recent interview, Hougan highlighted the sustained demand for ETFs, which has exceeded his expectations.He said that this wave of interest from traditional finance, akin to Bitcoin’s IPO in the US market, will lead to further institutional investment and drive up prices.Likewise, analysts at investment firm Bernstein expect Bitcoin to resume its upward trajectory, surpassing its previous all-time high of $69,000 and potentially reaching $70,000 this year.The analysts have expressed confidence in the cryptocurrency’s risk-reward profile, stating that no significant challenges are anticipated to impede its ascent.