Jurrien Timmer, director of global macro at Fidelity Investments, says Bitcoin’s recent failure to reach new highs is due to a slowdown in its network growth. Recently, he tweeted that Bitcoin is exponential gold, claiming that it is as much a store of value as traditional gold.
Timmer also establishes that price movements of the bitcoin are powerfully determined by the growth of its network because of the finite nature and sentiment linked to the BTC in the Fiscal Policy Cycle.
According to Timmer, the divergence between Bitcoin’s price performance and network growth has been notable in recent months. This variation, he believes, has prevented Bitcoin from achieving new all-time highs, despite its price reaching a peak of $73,737 in March.
Examining Bitcoin’s network growth through a historical lens, Timmer’s observations suggest that the number of non-zero addresses has followed a power curve pattern, with Bitcoin’s price oscillating around it
However, he points out that the current expansion rate of the Bitcoin network has somehow stagnated, even though its price has been on an upward trend lately. He suggested that this decreased rate of network expansion may be one of the primary reasons why Bitcoin has failed to surge.
Timmer speculates that for Bitcoin to regain its momentum towards new all-time highs, the network growth must accelerate once again. He raised the possibility that the next stage of the fiscal policy cycle, particularly the monetary subordination could trigger the acceleration.
Other variables like US inflation rates have proved to be lower, plus comments from Fed Chair Jerome Powell have in turn affected Bitcoin price volatilities further complicating its price action.
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