Bitcoin Magazine: Fidelity Investments Director Shares Bitcoin’s Adoption and Valuation Models

Valuing an asset is a key step to determine if it is worth investing in or not. Most assets are valued based on the cash flows they provide. That includes bonds and stocks, with an eye towards additional specific risks involved.

Other assets are more challenging to measure. Gold offers no cash flow for investors. Neither does bitcoin. Yet both are worth thousands of dollars. Figuring out how to value these assets can be key for future returns.

For bitcoin, looking at the adoption curve signals that it still has room to run. The number of bitcoin wallets continue to increase, although the rate of new wallet growth has slowed.

The rise of bitcoin ETFs also contributed to this trend. Now, investors can simply buy an ETF rather than obtain a bitcoin wallet.

Valuing bitcoin in the future requires looking at models such as increased adoption and money supply growth.

Since bitcoin is finite in nature, this combination works well as a monetary and tech trend. Most tech trends grow along an S-curve adoption model. Bitcoin is still in its earlier stages. On the monetary side, increased government spending, debt, or outright money creation should continue to benefit bitcoin’s price.

Looking at these trends overall, bitcoin may consolidate for a few months. Then, it should make a new cycle high in mid-2025.

To read the full methodology behind bitcoin’s future price rise, click here.