Bitcoin, valuations and the future of investing: Insights from Jurrien Timmer - December 1, 2025
Fidelity’s Director of Global Macro, Jurrien Timmer, shared his insights on navigating the current market landscape marked by volatility, valuation shifts and evolving global opportunities.
Here are some of the key points from his commentary.
Market volatility: healthy consolidation or warning sign?
Recent market and currency movements have shown negative sentiment, dampening hopes for a traditional year-end rally. Jurrien explained that the market is likely in a consolidation phase rather than signaling a downturn. This pause can be constructive by shaking out weaker hands and preventing bubble-like conditions. Evidence includes the improvement in market breadth, with the percentage of S&P 500 stocks above their 50-day moving average rising from 32% to 60%, indicating a more resilient environment despite corrections.
Bitcoin’s evolving role
Jurrien discussed Bitcoin’s price correction from a peak of $125,000 in October to around $80,000, with strong support near $75,000. He noted that Bitcoin’s price cycle is flattening as adoption matures, aligning it more with traditional network assets. While Bitcoin remains a store of value alongside gold, its urgency in this role has lessened due to the rise of stablecoins and other digital money alternatives. Bitcoin is increasingly regarded as "digital gold" but retains speculative characteristics contributing to its volatility. Jurrien emphasized a balanced approach to Bitcoin allocation within diversified portfolios.
Valuation metrics and earnings growth: cautious optimism
Market valuations remain elevated but not extreme, with the 5-year cyclically adjusted price-to-earnings ratio (CAPE) at 33. Jurrien highlighted that robust earnings growth supports higher valuations, with discounted cash flow models projecting modest expected returns (approximately 7% annual earnings growth and an equity risk premium near 3%). These figures suggest forward-looking returns may be lower than historical averages, underscoring the importance of realistic expectations.
Global market opportunities: diversification beyond the U.S.
International developed and emerging markets present potential opportunities, with varying valuations and competitive fundamentals. Emerging markets forecast earnings growth around 13% but carry higher risk premiums due to increased volatility. Jurrien pointed out the significant concentration risk in the U.S. market, where seven stocks account for nearly 40% of market capitalization, exposing investors to sector-specific shocks. Diversifying across geographies can mitigate concentration risk and capture growth in regions benefiting from favorable demographics and economic trends.
Geopolitical and policy dynamics: strategic portfolio positioning
The geopolitical environment is increasingly complex, characterized by rising protectionism, state capitalism and competition for technological leadership, especially in AI and semiconductors. The U.S. and China remain central players influencing tariffs, capital flows and industrial policies. These factors contribute to market uncertainty and necessitate strategic portfolio positioning to account for potential disruptions and opportunities from policy shifts. Additionally, expectations around Federal Reserve policy have evolved, with markets anticipating a pause or reversal in rate hikes amid moderating inflation pressures. This outlook suggests a more stable interest rate environment, which could potentially influence asset allocation decisions.
Conclusion: embrace informed adaptability
Jurrien’s insights underscore the need for a nuanced understanding of market volatility, asset dynamics, valuation, global diversification and geopolitical risks.
