Bitcoin To “Take More Market Share From Gold,” Says Fidelity’s Director Of Global Macro
Bitcoin has both a unique and compelling supply and demand dimension, and as its network increases, BTC’s value could increase even faster, as per
Amidst the ongoing bull market, everyone has a view on Bitcoin, and they are just as keen to share it with the world. Banks and institutions are particularly interested in the crypto market after the ultra-loose monetary policy of the central banks.
Jurrien Timmer, Director of Global Macro at Fidelity Global Asset Allocation, is the latest one whose report on the leading digital cryptocurrency talks about Bitcoin being considered a “legitimate and distinct asset class” among an increasing number of investors and portfolio managers.
A finite asset by design, Bitcoin has both a unique and compelling supply and demand dimension, it states.
“As its network increases, bitcoin’s value and durability could increase even faster,” adds the report.
According to Timmer, Bitcoin is also seen as a form of “digital gold” and may act as a stable store of value. Moreover, the cryptocurrency can potentially offer protection against inflation and even hyperinflation, he wrote.
Despite all the benefits Bitcoin offers, Timer is of the opinion that “bitcoin may not be an appropriate or prudent diversifier for all portfolios.”
The director of Global Macro then goes on to list the risks faced by the digital asset, including volatility, competitors, substitutes, and regulation.
“Fidelity head of global macro still doesn't get Bitcoin…these risks are invalid. Still early,” commented Charles Edwards of Caprioleio Investments.
The 10-page long report points out how Bitcoin is just a fraction of gold’s total global value of roughly $11 trillion still, not to mention total global financial assets of $160 trillion. Timmer said,
“With interest rates close to zero—or negative—and central banks printing money like there’s no tomorrow, is it any wonder that bitcoin seems to be having its day?”
He expects Bitcoin to “take more market share from gold” over time as a digital-analog of the precious metal but with greater convexity.