According to Jurrien Timmer, director of global macro at mutual fund behemoth Fidelity Investments, Bitcoin has seen little growth over the past year when it comes to its wallet count.
Timmer attributes this to the approval of US-based spot exchange-traded funds and MicroStrategy's buying spree. He has explained that large buyers do not actually need more than a few wallets.
The Fidelity exec believes that Bitcoin's adoption aligns with the S-curve cycles of other exponential technologies. In addition, the leading cryptocurrency also follows the power law model that is based on network effects: its value grows when more users participate in the network.
Gamza KhanzadaevWith that being said, it is now more difficult to track Bitcoin's adoption curve, according to Timmer.
A disappointing cycle?
Earlier today, Chris Kuiper, director of research at Fidelity's digital assets unit, noted that Bitcoin had barely managed to outperform the flagship S&P 500 market index over the past four years.
The leading cryptocurrency is only up by 17% on a compound annual basis. Meanwhile, the S&P 500 is up by 13%.
In fact, Bitcoin's risk-adjusted returns are actually lower. Bitcoin investors had to endure four times more volatility while getting underwhelming returns. "So this particular 4-year period has so far underperformed the previous cycles. If we really did peak earlier this year, then this will be quite the disappointing cycle," Kuiper said.
However, he does not rule out that the current cycle could be elongated.
Vladislav Sopov
Dan Burgin