The director of global macro at financial services giant Fidelity, Jurrien Timmer, believes that bitcoin can be considered as 'exponential gold'. He argues that while gold is often seen as a store of value, it is too deflationary and cumbersome to be used as a medium of exchange. This is one of the reasons why bitcoin is often compared to gold.
Fidelity's Director Considers Bitcoin as 'Exponential Gold'
In a series of social media posts, Jurrien Timmer shared his outlook on bitcoin. He stated that he sees bitcoin as a commodity currency that aims to be a hedge against monetary debasement and a store of value. He referred to it as 'exponential gold'.
"In my view, bitcoin is a commodity currency that aspires to be a store of value and a hedge against monetary debasement. I think of it as exponential gold."
Timmer also highlighted that historically, gold has performed well during periods of high inflation, negative real rates, and excessive money supply growth. Notable examples include the 1970s and 2000s.
However, Timmer pointed out that while gold is considered as money, its deflationary nature and lack of usability as a medium of exchange make it primarily a store of value. This is where bitcoin comes into play as it shares similarities with gold.
"It's too deflationary and clunky to be used as a medium of exchange. Hence, investors own it primarily as a store of value – and one of the many reasons bitcoin is often compared to gold."
Furthermore, Timmer discussed the correlation between bitcoin and other assets. He stated that based on September's data, bitcoin still shows a positive correlation with equities, although less so compared to other assets. He suggested that bitcoin should be included in the alternative investments bucket of a 60/40 portfolio. He also noted that bitcoin is negatively correlated with the U.S. dollar and T-bills, yet surprisingly uncorrelated with gold.
What are your thoughts on Fidelity's director of global macro's views on bitcoin and gold? Share your opinions in the comments section below.
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By: Kevin Helms
Title: Financial Giant Fidelity’s Director Sees Bitcoin as ‘Exponential Gold’
Sourced From: news.bitcoin.com/financial-giant-fidelitys-director-sees-bitcoin-as-exponential-gold/
Published Date: Sun, 05 Nov 2023 04:30:17 +0000
