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Fidelity, an asset management company that has been involved in cryptocurrencies for a long time, is dealing with trillions of dollars in customer assets. Fidelity’s expansion in the crypto field is positive for the markets in the long term. However, the short and medium-term risks are not concerned with the association of BlackRock or Fidelity’s name with crypto.
Fidelity Cryptocurrency Comment
Jurrien Timmer, Global Macro Director at Fidelity Investments, warns that two factors could limit the upward movement of Bitcoin (BTC) for a while. In his recent market analysis, Timmer said that when Bitcoin’s adoption rate is combined with high interest rates, the rise of the king of cryptocurrencies will be limited. According to him, we may not see a Bitcoin price beyond $45,000 in 2023 and most of 2024.
The analyst’s price forecast takes into account a Bitcoin adoption rate based on the past adoption rate of the internet and a downward pressure of at least 2% real interest rate, which includes inflation-adjusted nominal interest.
“What’s next for Bitcoin? If real rates stay at +%2 and the adoption curve continues to grow parallel to the internet adoption a few decades ago, then the upside looks somewhat limited for now.”
Bitcoin 2024 Forecasts
Timmer says, based on his chart, that Bitcoin’s upward movement can only reach a ceiling of $45,616 towards the end of next year. However, in this scenario, if interest rates fall, the BTC price can rise up to $96,210 within 2024.
“Bitcoin is trading in a holding pattern around 30,000 and continues to trade in front of itself based on real rates (the term premium, which is still negative for bonds) and network growth.”
Timmer also models the price movement if Bitcoin follows a typical power curve. The model suggests that Bitcoin could reach $68,992, the all-time high level, in December 2024.
“If Bitcoin’s adoption curve continues to grow along the slope of a typical power curve, it could take over a year to return to previous high levels.”
At the time of writing, the BTC price is trading well below all these upward targets, at around $26,000. August 25th, Jackson Hole, and August 22nd, the potential GBTC decision will be two critical dates that investors will closely watch next week.
