According to U.Today, Jurrien Timmer, Director of Global Macro at Fidelity, has offered a fresh perspective on the ongoing debate of Bitcoin versus gold as a superior store of value. Timmer suggests that both assets are often seen as hedges against fiscal dominance, a situation where the government dilutes the value of money by increasing the money supply. He believes this argument is fundamentally sound, as sustained increases in the money supply typically result in inflation. This relationship is apparent when comparing the 10-year growth rate of the M2 money supply and the consumer price index.
Timmer proposes that for Bitcoin and gold to truly establish their roles as stores of value, there needs to be consistent above-trend growth in monetary aggregates. However, he notes that this has not yet happened. The significant increase in real money mass during the pandemic was quickly reversed by the Federal Reserve's tightening policies, suggesting that the expected conditions for Bitcoin to thrive as a competitive alternative to gold have not yet been met.
Timmer also addresses the concept of cryptocurrency as 'gold 2.0,' instead referring to it as 'exponential gold' due to its combination of monetary properties and advanced network technology. The debate that Bitcoin could surpass gold in market capitalization is not new and has been ongoing in the community since the cryptocurrency first became publicly known. With the introduction of spot Bitcoin ETFs, this debate has only intensified as hundreds of millions of people can now purchase the cryptocurrency in the traditional way.
Currently, gold’s market capitalization is over $15.6 trillion, while Bitcoin’s is approximately $1.33 trillion. For Bitcoin to match gold’s market cap, it would need to grow by 11.72 times, reaching an estimated price of nearly $790,000 per BTC.