Fidelity analyst explains why Bitcoin is on its way to $144,000

• Director of Global Macro at Fidelity Jurrien Timmer has predicted that Bitcoin may reach $144,000

• His prediction took into account the supply limitation of Bitcoin.

Bitcoin is currently hovering around $30,000, which is over a 50 percent reduction from its $69,000 all-time high. Crypto experts and analysts have shared dividing opinions on the next move of the digital asset. The recent one comes from the Director of Global Macro at Fidelity Jurrien Timmer who has predicted that Bitcoin may reach $144,000.Stock-to-Flow model (S2F) is one of the most commonly used in predicting the next high or low and is very popular among crypto experts and investors. 

Speaking on the model, it was evident that Timmer has a better approach to stock and adoption data. According to him, the S2F model has a problem as it only focuses on scarcity. However, scarcity alone cannot be used to drive the price if it is not adopted, used, or has any other use case.

When I first went down the Bitcoin rabbit hole in late 2020, one of the first things I delved into was @100trillionUSD’s stock-to-flow model (S2F). I’m oversimplifying, but it’s essentially a power regression curve of BTC against the so-called inflation rate (growth in supply) /2

— Jurrien Timmer (@TimmerFidelity) June 2, 2022

To address this issue, Timmer built an S-curve model that is very similar to the mobile phone adoption curve. This will make sure that Bitcoin’s future adoption rate and overall network growth are properly measured for accurate prediction. 

This modified supply model not only better reconciles the demand model, but it appears to better explain Bitcoin’s lackluster price action of late. BTC never went to the S2F model’s $100,000+ projections. Maybe this is why?@100trillionUSD, I’m curious to hear your take on this.

The Bitcoin prediction involved three different models

He also added that the unprecedented Bitcoin growth prediction by the model could have been accurate had it factored in its adoption rate. He also expressed his doubt about the reliability of the model as he believes it may not work now as the Bitcoin market cap hits nearly $600 billion. 

In his prediction, he took into account the supply limitation of Bitcoin, so supply projection may help to accurately know the degree of growth and adoption pace of the asset. Using three different models, he noted that Bitcoin is in a very good position to rise to $63,000. According to him, Bitcoin may rise to $144,000 in the best possible scenario. This means the movement of the digital asset will be similar to the mobile phone S-curve demand model. 

I remain bullish on Bitcoin as an aspiring store of value in a world of ongoing financial repression, but the above exercise is a good reminder that we should always revisit our assumptions, especially when the price action deviates from expectations.

In April, Antoni Trenchev, CEO of crypto lending firm Nexo, also predicted that Bitcoin will hit $100,000 in the next 12 months. However, he noted the possibility of the digital asset falling in the short term with the traditional financial markets as the Federal Reserve introduces its monetary policies. 

Related: Arthur Hayes says investors shouldn’t expect a quick BTC recovery despite finding the bottom