Fidelity Investments Analyst Explains Why Bitcoin Adoption Has Slowed Down

Fidelity Investments’ Director of Global Macro, Jurrien Timmer, has provided an explanation for the recent slowdown in Bitcoin adoption. Timmer acknowledges Bitcoin’s potential as a store of value, dubbing it “exponential gold,” but points out the divergence between the deceleration in Bitcoin’s network growth and its price movements. He highlights that Bitcoin’s price is primarily driven by its network growth, influenced by factors such as scarcity, monetary and fiscal policies, and market sentiment. Despite price gains, the growth of Bitcoin’s network has slowed down, leading to the recent slowdown in adoption. Timmer illustrates how Bitcoin’s growth curve aligns with historical technological advancements and notes that Bitcoin’s boom-bust cycle is unique in this regard. Veteran trader Peter Brandt also suggests that the current advance in Bitcoin’s price might be nearing its end based on diminishing gains in each bull market cycle. However, Ki Young Ju, founder and CEO of on-chain analytics platform CryptoQuant, argues that Bitcoin’s slow circulation may not be a bad thing. Ju believes Bitcoin’s circulation velocity will peak when it is widely used for payments, but since it has evolved into “Digital Gold,” held by institutions for long-term purposes, traditional adoption metrics may not accurately reflect its usage. The perspectives from Ju and the trend of institutional interest in Bitcoin investments suggest that the story of Bitcoin is far from over.