Bitcoin may not hit $100,000 by the end of 2021 as some investors hope, but the cryptocurrency could reach that target in a couple of years, Fidelity Investments director of global macro Jurrien Timmer said Wednesday. The price of bitcoin has been climbing for more than two weeks, driven primarily by institutional investors who are long-term investors in the digital asset. Timmer noted that investors who have held bitcoin for three months or less make up just 14% of all coins in circulation currently, which is below the threshold at which most bottoms happen, he said on CNBC's " Squawk on the Street ." "At the top it was about 35%," Timmer said. "This has not been a momentum run fueled by short-term speculators. That gives me some confidence that this is a sustainable move and not a bubble that's about to burst." He said that a supply model and a demand model he studies imply that bitcoin is on its way to $100,000. "The next and last time those two models intersect is at $100,000 in a couple years," Timmer said. "My sense is the trajectory is up, and there really is no evidence that this is a bunch of momentum chasers." Bitcoin is up 96% in 2021. The cryptocurrency broke through the $57,000 level Monday and traded at that level Wednesday. Many bitcoin bulls see the digital asset as a hedge against inflation and an alternative to gold. Timmer noted that the cryptocurrency has a scarcer supply than the precious metal. "It makes sense that bitcoin would outperform gold, but it's always a question of the relative value, just like we would look at gold versus silver," he said. "Bitcoin and gold are different players on the same team," Timmer added. "Bitcoin's trading at about 32x gold and it's not moving parabolically away from gold. It's moving up away from gold, but not in a sense where I think its unsustainable." Bitcoin's value proposition as a store of value gained strength this year, even as El Salvador became the first country to make it a legal currency. Many say greater adoption of bitcoin could threaten the U.S. dollar's reserve status. Timmer disagrees, however. "I've heard the point made that maybe it actually further ensures the dollar will maintain its reserve status because all of a sudden currency will be available in farther flung regions of the world through bitcoin, and it's still probably going to be connected to the dollar in some way," he said. "I don't think the dollar's hegemony as a reserve currency is at risk at all."
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Bitcoin may not hit $100,000 by the end of 2021 as some investors hope, but the cryptocurrency could reach that target in a couple of years, Fidelity Investments director of global macro Jurrien Timmer said Wednesday.