Why So Bearish? Fidelity Suggests Bitcoin Price Could Rise To $100 Million

Boston-based investment firm Fidelity presented one of the most bullish scenarios for the price of Bitcoin, Anthony Pompliano said in his podcast “The Best Business Show”. Based on the Stock-to-Flow model develop by analyst Plan B, BTC’s price could stand at $100 million by 2035.

With over $10.4 trillion in assets under management, Fidelity investment and its digital assets stand-alone company Fidelity Digital has been bullish on Bitcoin for a long time. The company started dabbing into the crypto space as early as 2014, Pompliano said, and started developing mining capabilities and BTC-based products.

The Bitcoin price prediction was presented during a Fidelity webinar called “Understanding Bitcoin, What Can History Teach Us?” by Jurrien Timmer, the firm’s Director of Macro. Timmer is a Bitcoin bull and has been making updates on BTC’s price via his Twitter account.

On several occasions, he has compared BTC with Gold in 1970. The chart below was shared by Timmer on August 20th, showing the similarities between the cryptocurrency and the precious metal’s chart.

As the chart suggests, Bitcoin’s recent price action looks similar to that of Gold during that year. From this comparison and due to the growth in its fundamentals, Timmer believes BTC is “ready to resume its uptrend”.

The Stock-to-Flow model presented by Timmer predicts continues appreciation in BTC’s price due to a reduction in its annual inflation rate. By the end of the decade, when Bitcoin’s inflation rate will be around 0.5%, this model predicts that the cryptocurrency will be valued at $1,000,000.

5 years later, as the same metric drops to 0.2%, BTC’s price will stand at $100,000,000. As Pompliano said, it’s unclear if the investment firm believes the prediction will be fulfilled, but

(…) according to the Stock-to-Flow model, which they appear to be believers (…) that is what the Stock-to-Flow model will show. Fidelity, as they become more interested in Bitcoin, appear to become more and more bullish on the asset itself.

In the 1970s, Pampliano said, the price of Gold stood at around $35. After the U.S. de-pegged its currency from the precious metal, embracing the Fiat Standard, Gold has risen to over $1,800.

This has been one of the most “incredible repricing” of an asset in the past 100 years. If the same were to occur with Bitcoin, the cryptocurrency could see a 2000x increase from its current value at $48,845, at the time of writing. Pompliano added:

(…) if they (Fidelity) are saying that basically we are in the 1970s of gold but for Bitcoin now, they are calling for a very very material increase in the price of Bitcoin. To see Fidelity, show a chart that says that Bitcoin is going to be at 100 million dollars by 2035 is very incredible (…).

Pompliano reiterated that the fact that Fidelity, one of the biggest investment firms in the world with a lot of time exploring BTC and the crypto market, is showing this model to clients it’s a positive signal.

The Stock-to-Flow model evaluates an asset to make a price prediction based on its supply/demand. The model has been applied to Gold, equities, and other assets and proven to be accurate.

Analyst Plan B was the first to apply this model to BTC and, according to recent updates, it has proven to be accurate. However, the model is controversial and has many detractors that believe that it won’t be successful due to BTC’s characteristics.

#Bitcoin August closing price $47,156 .. like clockwork pic.twitter.com/3hkp71FTXo

— PlanB (@100trillionUSD) September 1, 2021

At the time of writing, BTC displays strength in the daily chart as the bulls attack the resistance at current levels. A break above $48,500 could lead BTC’s price to the lows at $50,000.