- Jurrien Timmer highlights a divergence between Bitcoin’s network growth and price movements.
- Ki Young Ju points out Bitcoin’s lowest circulation velocity since 2013.
Jurrien Timmer, Director of Global Macro at Fidelity Investments, has clarified the reasons behind the slow adoption of Bitcoin (BTC).
Even while Timmer calls BTC “exponential gold” and a possible store of value, he draws attention to a discrepancy between the price swings and the slowdown in the network growth of the cryptocurrency.
In my view, bitcoin is exponential gold and an aspiring player on the store of value team. My work suggests that the price of bitcoin is driven primarily by the growth in its network, which is in turn driven by bitcoin’s unique scarcity feature, as well as the monetary and fiscal…
— Jurrien Timmer (@TimmerFidelity) June 13, 2024
Bitcoin’s Network Growth and Price Dynamics
Timmer emphasizes that scarcity, monetary and fiscal policy, and market sentiment all have an impact on Bitcoin’s network expansion, which in turn affects its price.
Even though the price of BTC has increased recently, its network expansion has slowed down, resulting in a divergence that could be the reason for the current decline in acceptance.
Meanwhile, according to CoinMarketCap data, the price of BTC is currently at $66,744.19, having fallen 1.42% over the last 24 hours and exhibiting a bearish trend over the previous week with an 8.16% fall.
Historical Growth Curves and Market Sentiment
Timmer showed in tweets how the growth curves of Ethereum and Bitcoin reflect past technological breakthroughs. He pointed out that the number of non-zero addresses on the Bitcoin network follows a power curve, and its price fluctuates around it.
This boom-bust cycle is exclusive to BTC, he says. Reacting to Timmer’s observations, seasoned trader Peter Brandt pointed out that gains in each bull market cycle are eroding and speculated that the present surge may be coming to an end.
Timmer concurred, pointing out that the path of price discovery toward a mature asset makes sense and the power curve is asymptotic.
Bitcoin’s Circulation and Institutional Interest
Also commenting, Ki Young Ju, the CEO and founder of the on-chain analytics platform CryptoQuant, noted that the circulation velocity of Bitcoin had dropped to its lowest level since 2013.
Thank you for sharing, sir.
I believe the #Bitcoin Adoption Curve was a meaningful indicator until three years ago. However, Bitcoin's circulation velocity has been at its lowest since 2013.
While the evaluation method you mentioned applies to Bitcoin as a means of payment,… pic.twitter.com/O39OvML0tY
— Ki Young Ju (@ki_young_ju) June 13, 2024
Its speed, he thinks, will peak when BTC is extensively utilized for payments. Despite its original design as “P2P Electronic Cash,” Ju contended, BTC has developed into “Digital Gold,” with institutions keeping it without making many transactions.
The usage change suggests that conventional measures of Bitcoin acceptance might become less applicable.
Ju said it might be more efficient to quantify application usage using op_code or to divide cohorts for Bitcoin transactions as payments in order to precisely evaluate the adoption curve.
Ju’s thoughts correspond with broader trends of institutional interest in Bitcoin investments. For example, Canadian fintech DeFi Technologies just made 110 BTC its first purchase of Bitcoin as its treasury reserve.
This institutional involvement backs the developing story of Bitcoin as a currency used for daily transactions rather than as a store of value.
Meanwhile, ETHNews reports that well-known expert Dave the Wave highlights the long-term bullish sentiment despite present market patterns by predicting that Bitcoin’s price might reach $300,000 by 2025.