Jurrien Timmer continues to give insightful frameworks in order to understand Bitcoin’s growth and valuation. As a recent updateTimmer’s views on Bitcoin adoption and its value trajectory are illustrated in charts that show both historical and hypothetical trends.
Timmer’s model aims to simplify Bitcoin’s complex growth dynamics by bridging the divide between network adoption, and valuation. “While the supply is known, the demand is not,” He stressed the importance of macroeconomic variables, such as real interest rates and monetary policies.
Adoption curves: Consistent but Slowing Growth
Timmer stated that, despite the slowdown of Bitcoin network growth as indicated by the increasing number wallets showing a positive balance, this trend remains in alignment with his revised adoption graph. The internet’s adoption curve is flatter, but Bitcoin’s remains steeper. This indicates its rapidly maturing and rapid growth.
Timmer also highlighted an important limitation of the wallet growth measurement: The understated number of addresses and wallets due to Bitcoin ETFs that consolidate all holdings in a small amount. “It’s very likely that the wallet/address count is understated,” he pointed out, noting that ETFs conceal the broad distribution of Bitcoin adopters.
Adoption Dynamics meets Monetary Policy
Timmer’s new model builds on previous ones by adding money supply growth and real interest rates to the framework. The charts are updated to compare the two possible paths Bitcoin valuation could take: one driven purely by adoption rates and real rates; and the second including inflationary monetary factors.
“Again, these are not predictions,” Timmer clarifies “but merely attempts at visualizing the use case on the basis of adoption, real rates, and monetary inflation.” This approach reveals how macroeconomic external factors such as the monetary policies could affect Bitcoin’s valuation and adoption.
Why this Matters
Timmer’s updated models strengthen Bitcoin’s status as a mature financial asset. He offers an in-depth view of Bitcoin by combining Metcalfe’s Law with historical S-curves and macroeconomic factors. Session 1: The Importance of Adoption in Driving Bitcoin’s Value.
Timmer’s insight is a useful framework that helps Bitcoin supporters and skeptics understand the dual nature of Bitcoin as both a currency and network. Incorporating monetary deflation into his models highlights Bitcoin’s potential to be a hedge from fiat currency inflation.
You have a long road ahead
Timmer’s models are a crucial tool for tracking Bitcoin as it continues to develop. Whether it’s the flattening of the adoption curve or the interplay between monetary policy and valuation, his analysis underscores the asset’s growing complexity—and its enduring relevance in the financial world.
Investors, analysts, enthusiasts and others will find these insights a great reminder that Bitcoin has a transformative power, even though its growth rate is maturing.
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Source: bitcoinmagazine.com
