The future of bitcoin prices from the point of view of a fidelity expert; Short-term fluctuations are not so important

Jurrien Timmer, an economist at Fidelity Investments, said that in order to evaluate the long-term performance of Bitcoin, one has to look at things other than price fluctuations. He believes that the growth of the network and the acceptance of bitcoins around the world will largely guarantee the future of this digital currency.

To Report Daily Hoodel, Juren Timer, director of macroeconomics at Fidelity Investments, is optimistic about the long-term rise in bitcoin prices. He recently told his 99,100 followers on Twitter that bitcoin fluctuations in the $ 30,000 to $ 65,000 range do not matter much.

He wrote about it on Twitter:

Bitcoin has been in the volatile range for a year, trading between $ 30,000 and $ 65,000. Many people may talk about going up and down; But most of these arguments are futile.

According to Timer, traders should focus on network growth instead of bitcoin price charts. He specifically focused on the bitcoin demand curve, which shows the number of wallets in stock.

Fidelity expert said:

The most important thing is for the bitcoin demand curve to move up and right (forward). In the image below, you can see that the graph of the number of wallets with Bitcoin inventory is still bullish and follows a simple power regression curve (orange dashed on the chart).

Considering the growth and value of the Bitcoin network, Timer said that the bitcoin price trend has so far followed Metcalfe’s law. This rule was originally used in the computer and telecommunications industry and shows that the value of a network is equal to the square of the number of users.

He said:

The value of the Bitcoin network has increased almost 867 times since 2011 and its price has increased 640,633 times. If we use Metcalfe’s law and get the square of 867, the result will be 751,111, which roughly corresponds to a 640,633-fold increase in the price of bitcoin.

According to Timer, the acceptance chart for Bitcoin is very similar to the acceptance chart for mobile and Internet subscriptions. Because of this, he thinks the price of bitcoin will grow steadily in the coming years.

Timer writes:

So what happens to the bitcoin demand curve? The answer to this question is that the bitcoin demand curve may be similar to the following curves. These two curves are mobile and Internet subscription acceptance curves that have different slopes, but their long-run growth paths are generally similar.