Fidelity Investments\u2019 global macro director Jurrien Timmer says that a recession could spark a big rally for Bitcoin (BTC<\/a>).<\/p>\n Timmer tells<\/a> his 167,000 followers on the social media platform X that current high-interest rates need to decline for Bitcoin to put up big gains.<\/p>\n \u201cWhat will keep driving it? <\/em><\/p>\n First, the macro narrative needs to change from restrictive to accommodative.<\/em><\/p>\n Below is a regression model that lays out a price band based on a typical adoption curve and a range of real rates (from -2% to +2%).\u201d<\/em><\/p>\n The macro expert\u2019s chart uses a price range derived from the Bitcoin adoption rate based on the past adoption rate of the internet and a real interest rate range between 2% and -2%, which is nominal interest minus inflation.<\/p>\n Looking at his chart, Timmer believes that Bitcoin\u2019s move to the upside may only be to the $45,616 level towards the end of 2025. However, if interest rates come down, his chart suggests Bitcoin could see a high of $96,210 before 2025 comes to a close.<\/p>\n The macro expert believes<\/a> that a recession would cause the Federal Reserve to pivot and then investors would likely view gold and Bitcoin as safe haven investments, driving the assets\u2019 prices higher.<\/p>\n \u201cIf and when that long-elusive recession finally hits, and the Fed pivots for real, Bitcoin and gold could be viewed as high-powered hedges.\u201d <\/em><\/p>\n According to Timmer, Bitcoin could print<\/a> gains in the next market cycle regardless of how the stock market performs.<\/p>\n \u201cBitcoin has become less correlated to equities, and less volatile. Its annual\u00a0volatility\u00a0has declined from 85 in 2021 to 55 (which is still high), and its 12-month correlation has fallen from 65% to only 7%. So Bitcoin might provide uncorrelated returns in the next market cycle.\u201d<\/i><\/p>\n The macro expert also says<\/a> that for Bitcoin to reach new all-time highs, the Federal Reserve will need to inject more liquidity into the markets, which it did during the Covid-19 pandemic to prop up the economy through quantitative easing, also known as printing money.<\/p>\n \u201cBitcoin bulls need the money printers to go to work again. The money supply exploded in 2020-21, a scenario in which gold bugs and Bitcoin bulls thrived. When the money supply grows faster than its long-term growth rate, gold\u2019s market share has gone up.\u201d<\/em><\/p>\n Bitcoin is trading for $26,931 at time of writing, down 0.5% in the last 24 hours.<\/p>\n Don’t Miss a Beat \u2013 Subscribe<\/a> to get email alerts delivered directly to your inbox <\/span><\/em>
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