Fidelity’s Jurrien Timmer has noted that Ethereum has trumped Bitcoin in terms of user growth
Jurrien Timmer, director of global macro at mutual fund giant Fidelity Investments, says Ether, the second largest cryptocurrency, is undervalued relative to Bitcoin in a recent Twitter thread.
Timmer’s analysis is based on the rapid growth experienced by the Ethereum network. He notes that Bitcoin has been significantly outpaced by its competitor.
According to Timmer, the progression of Ethereum-Bitcoin flipping will be an “interesting thing to watch” next year.
Ether has vastly outperformed Bitcoin this year, gaining a whopping 260% against the crypto king. The top altcoin has been thrust into the spotlight because of the non-fungible token boom and the sprawling decentralized finance landscape.
Bitcoin has also suffered from growing concerns about its carbon footprint. JPMorgan analyst Nikolaos Panigirtzoglou said last month that Ethereum’s upcoming transition to proof of stake makes it a better bet than the flagship cryptocurrency.
Timmer assumes that investors continue to view Bitcoin as a superior store of value because of its scarcity. The disinflationary cryptocurrency benefited from near-zero interest rates and monetary easing that started at the onset of the pandemic.
While Ethereum recently experienced its first deflationary week after its major EIP-1599 update, concerns persist about its malleable monetary policy.
It’s not just stock-to-flow
Timmer believes that Bitcoin’s price appreciation is not solely attributed to the stock-to-flow model.
He believes that Metcalfe’s Law, which states that the value of a network is proportional to the growth of users, is also at play:
Bitcoin’s fundamentals explain a lot of its meteoric price gains. Metcalfe’s Law at work. It’s not just about S2F.
The chief executive of Fidelity expects user growth to remain the main driver of the price of Bitcoin.
