Fidelity Investments’ global macro director Jurrien Timmer warns that two factors could limit Bitcoin’s (BTC) move to the upside for a while.
Timmer tells his 167,000 X followers that Bitcoin’s adoption rate, coupled with high interest rates, could keep the king crypto from soaring beyond the $45,000 range in 2023 and most of 2024.
The analyst’s price prediction factors in a Bitcoin adoption rate based on the past adoption rate of the internet and the downward pressure of a real interest rate of at least 2%, which is nominal interest with inflation factored in.
“What’s next for Bitcoin? If real rates remain at +2%, and the adoption curve continues to grow in line with internet adoption a few decades ago, then the upside seems somewhat limited for now.”
Looking at his chart, Timmer believes Bitcoin’s move to the upside may only be to the $45,616 level towards the end of next year. However, if interest rates come down, his chart suggests Bitcoin could see a high of $96,210 before 2024 comes to a close.
Based on the two factors, Bitcoin is currently overvalued and a market correction could bring the king crypto down to $20,933, according to Timmer.
“Bitcoin has been in a holding pattern near $30,000, and continues to trade somewhat ahead of itself, at least based on real rates (the still-negative term premium for bonds is relevant) and network growth.”
Timmer also models Bitcoin’s price action if it were to follow a typical power curve. The model shows Bitcoin returning to its all-time high of $68,992 in December 2024.
“If Bitcoin’s adoption curve continues to grow along the slope of a typical power curve, it could take more than a year to revert to the old highs.”
Bitcoin is trading for $26,013 at time of writing, down 7% in the last 24 hours.
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