Bitcoin Seen as ‘Accelerated Gold’ by Fidelity’s Global Macro Chief
The world-renowned financial service provider, Fidelity’s Global Macro boss perceives Bitcoin to be an ‘accelerated gold’. He expressed his opinion saying that gold is overly deflationary and inconvenient for usage due to its exchange medium. Due to such properties, gold is primarily regarded as a means to preserve wealth, which is one of the many bases for Bitcoin being frequently likened to gold.
Fidelity’s Top Executive Considers Bitcoin an ‘Accelerated Gold’
Fidelity, a global financial services behemoth, received insight about Bitcoin from its Global Macro Head, Jurrien Timmer. He divulged his thoughts about Bitcoin on a popular social media platform:
From my perspective, Bitcoin is an aspiring value store and a barrier against monetary debasement, acting as a commodity currency. Therefore, I see it as an accelerated gold.
Timmer provided an overview of historical trends saying that during periods when inflation is high, real rates are negative, or when the money supply growth is excessive, gold tends to perform well and increase its market share in terms of GDP. Prominent instances of this trend can be seen during the 1970s and 2000s.
Although he acknowledged “Gold is money,” he countered:
It is overly deflationary and too inconvenient for usage as an exchange medium. This makes investors primarily consider it as a means to preserve wealth, which is why Bitcoin is often likened to gold.
Continuing the discussion on Bitcoin, he stated that based on data until September, Bitcoin largely remains positively correlated with equity. Still, it’s less so than many other assets. “Regarding where Bitcoin should stand in a 60/40 portfolio, in my opinion, it should be a part of the alternate asset bucket,” he affirmed. However, he pointed out that Bitcoin’s correlation is diminishingly positive against the S&P 500 and is not negatively correlated with much else.
Timmer further added that Bitcoin shows a negative correlation to the U.S. Dollar and Treasury Bills. On the surprising side, Bitcoin doesn’t reflect correlation with gold. He asserts, “This is a downside as it casts doubt on the argument that Bitcoin and Gold serve the same purpose. However, it provides an advantage, as we want as many alternate assets to show no correlation with both the 60/40 index and other alternate assets”. He concluded by saying, “If Bitcoin and Gold are playing for the same team but in different games, then that’s not too bad.”
What are your thoughts on the perspectives shared by Fidelity’s Global Macro director about Bitcoin and Gold? Feel free to share your views in the comment section.
Frequently asked Questions
1. What is Fidelity’s stance on Bitcoin?
Answer: Fidelity, a financial giant, views Bitcoin as exponential gold, recognizing its potential as a valuable asset.
2. Why does Fidelity consider Bitcoin as exponential gold?
Answer: Fidelity’s director believes that Bitcoin shares similar characteristics to gold, such as scarcity and durability, making it an ideal store of value in the digital era.
3. What are the implications of Fidelity’s perspective on Bitcoin?
Answer: Fidelity’s positive perspective on Bitcoin reinforces the growing acceptance and recognition of the cryptocurrency as a legitimate investment option within the traditional financial industry.
4. How does Fidelity’s endorsement impact Bitcoin’s reputation?
Answer: Fidelity’s endorsement adds credibility and legitimacy to the Bitcoin market, potentially attracting more institutional investors and enhancing Bitcoin’s reputation as a reliable and secure investment option.
5. What factors contribute to Bitcoin’s perceived value as exponential gold?
Answer: Several factors contribute to Bitcoin’s perceived value as exponential gold, including its limited supply, decentralized nature, and increasing global adoption as a medium of exchange and store of value.
6. Is Fidelity actively involved in Bitcoin investment?
Answer: Yes, Fidelity not only views Bitcoin as exponential gold but also offers Bitcoin investment products and services to its customers, further signaling its active involvement in the cryptocurrency market.
7. How does Fidelity’s stance on Bitcoin align with recent trends in the financial industry?
Answer: Fidelity’s positive view on Bitcoin aligns with the increasing trend of financial institutions and corporations embracing cryptocurrencies as part of their investment strategies, reflecting a shift in mainstream adoption and acceptance of digital assets.