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Here’s What Apple’s Growth Trajectory Tells Us About Bitcoin’s Future

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  • After hitting an all-time high of more than $69,000 in mid-November, the digital asset had fallen to lows of roughly $33,000 by the end of January. BTC had dropped 41% since November’s all-time high and was trading at $40,693 at press time, having lost 7.4% of its value in only one day.
  • If Apple’s increase in market value should have been about the square of its increase in sales, then Apple’s market value should have grown at a pace of 2855x. It’s in the ballpark at 1699x.
  • Similarly, since 2011, Bitcoin’s value has climbed 867 times, but its price has increased 640,633 times, according to the executive. As a result, using Metcalfe’s law, squaring 867 yields 751,111, which is approximately in line with the 640,633x.

Since the market meltdown in May of last year, the top cryptocurrency Bitcoin, as well as all of its linked assets, have experienced significant volatility. Its impacts have been particularly noticeable in recent months. After hitting an all-time high of more than $69,000 in mid-November, the digital asset had fallen to lows of roughly $33,000 by the end of January. BTC had dropped 41% since November’s all-time high and was trading at $40,693 at press time, having lost 7.4% of its value in only one day.

Network Adoption’s Consequences

However, Fidelity’s Head of Macro Jurrien Timmer believes that the concern over Bitcoin’s price performance is’mostly noise,’ and that what matters most is Bitcoin’s network effects. The executive said on Twitter that the virtual asset’s demand curve accurately depicted Bitcoin’s growth, since active and non-zero addresses had been on a continual rise upward trajectory, regardless of its market capitalization. Timmer also pointed out that Bitcoin’s s-curve, which measures adoption, has been likened to that of early internet and cellphone users. In fact, the rise of Apple, the technology behemoth, might give us a good sense of Bitcoin’s future growth.

Timmer drew an S-curve for Apple based on its growth over the last three decades and applied the Metcalfe equation, which states that the value of a telecommunications network is the square of the total number of users in the system who are connected. He continued, If Apple’s increase in market value should have been about the square of its increase in sales, then Apple’s market value should have grown at a pace of 2855x. It’s in the ballpark at 1699x.

Comparing Apples and Oranges

Similarly, since 2011, Bitcoin’s value has climbed 867 times, but its price has increased 640,633 times, according to the executive. As a result, using Metcalfe’s law, squaring 867 yields 751,111, which is approximately in line with the 640,633x. Bitcoin and Apple, according to Timmer, follow a similar route as mandated by their network growth, and a similar general long-term growth path may be derived by comparing previous Subscriptions to mobile phones and internet uptake on an S-curve.

Timmer isn’t the first to say that an asset’s value is generated from its network effects; he previously said that one of the reasons Ethereum was lagging behind Bitcoin was because it lacked both scarcity and rising adoption. And he isn’t alone in his belief. In a recent research, investment bank Wells Fargo suggested that Bitcoin was entering a hyper adoption mode similar to that of the early internet in the mid-90s, putting it in a ‘early, but not too early investment stage.’

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