Is Bitcoin Losing Momentum? Analyst Weighs In on Its Recent Performance

Bitcoin's Current Performance

Bitcoin (BTC-USD) is currently struggling to make consistent new highs, unlike gold (XAUUSD:CUR). According to Jurrien Timmer, director of global macro at Fidelity, this lack of momentum is significant. He suggests that Bitcoin may have already frontloaded its gains during its recovery from the dip to $15,000 in late 2022.

Bitcoin and Gold: Different Players?

Timmer posits that both Bitcoin and gold are "different players on the same team", but they may not be operating in sync. He believes that Bitcoin aspires to have the utility of money, describing it as "exponential gold"—gold with an exponential network feature. However, for Bitcoin to effectively compete with gold, its adoption curve must continue to grow.

Adoption and Valuation

According to Metcalfe’s Law, as the adoption curve for Bitcoin grows, its valuation and price should increase as well. Nevertheless, Bitcoin has experienced a boom-bust cycle, often overshooting and undershooting its underlying value, a phenomenon typical for an asset in price discovery.

Credits to Fidelity.

Recent Price Trends

Recently, Bitcoin's price has flattened, remaining between $60,000 to $70,000 since late February, with the number of addresses holding at least $1 stagnating at 46 million. Despite a steep gain at the beginning of the year—driven by the anticipation of ETFs—the index is up 55.65% year-to-date.

The Future of Bitcoin

If Bitcoin has indeed matured and become less susceptible to boom-bust swings, its adoption curve will ultimately dictate its future price movement. Timmer concludes that while a potential acceleration in growth may be on the horizon—especially if the world moves towards fiscal dominance—currently, gold is "stealing the show".