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June 28, 2022
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A bitcoin could be worth $1 billion by 2038 says Fidelity

Fidelity’s Jurrien Timmer predicts Bitcoin will reach $1 billion two decades from now, right after an earlier forecast of $100 million for 2035.

A bitcoin could be worth $1 billion by 2038 says Fidelity, director of Global Macro and fidelity. Timmer backed up his claim with a 4-hour BTC/USD chart that combined his stock-to-flow model with his demand model. In Timmer’s words:

“Metcalfe’s Law states that as the number of its users grows linearly, the value of a network (or, by inference, the price of bitcoin) grows geometrically.”

The implication is that Bitcoin’s utility value will surpass your operational network. This operational network encompasses buyers, sellers, exchanges and ATMs. In addition, it also includes participating retailers, directly and indirectly, and some leading organizations such as the Dallas Mavericks and AT&T. Completing this network are a few insurance companies, several banks and a multitude of small businesses.

Timmer’s own demand model grows very slowly in proportion to the stock-flow combination supply model. The asset management director’s demand model predicts that BTC will reach $1 million in 2030. On the other hand, the stock-flow combination model predicts a price between $1 million and $10 million in 2030.

Jurrien Timmer’s demand model seems to represent historically the floor or bottom of the price. The stock-to-flow model appears to be a better fit for the peak. However, the gap between the two models increases significantly after 2030. One of the reasons suggested for the gap widening after 2030 is the change in the value of the dollar. It should be noted, however, that this reasoning is not definitive.

Bitcoin could reach $1 billion because of changes in dollar value

Timmer said the value of the dollar changes relative to other assets. He further pointed out that $1 invested in stocks in the 18th century is worth about $4 billion of today’s money. Under that assumption, $1 million today could be worth $1 billion in twenty years.

Changes in the value of the dollar, especially depreciation over several decades, make the same value with less purchasing power. That’s why large sums back then seem less by today’s standards. For example, $1 million could buy a lot of significant things a few decades ago. To put this in perspective, reasonably high-end homes in the US cost between $20,000 and $50,000. The same $1 million may not be enough for the same class of homes today.

There are a growing number of billionaires around the world today. Some observers even believe we can see the first trillionaire in this lifetime. The same applies to organizations, with several companies now passing the $1 trillion market value assessment.

Fidelity had previously pegged BTC to hit $100 million in 2035 using the same stock-to-flow model. Jurrien Timmer also made these predictions back then. As Timmer’s uncertain and untested predictions are, he’s not the only one with such high predictions. German bank also made predictions that Bitcoin will dominate in 2030.

Source: Coinspeaker

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