Simon Ng Fidelity’s Director Considers Bitcoin as ‘Exponential Gold’
Jurrien Timmer, Fidelity’s Director of Global Macro, recently offered insights into his perspective on bitcoin through a number of updates posted on a social media platform earlier this week. On Wednesday, he stated:
To my mind, bitcoin serves as a burgeoning asset aiming to be a solid store of value and a defense against the dilution of currency. It strikes me as what I would call exponential gold.
“Typically, in eras characterized by high inflation, negative real interest rates, and/or surging money supply, gold has proven to be a strong asset, securing a larger share of the market in relation to GDP. The 1970s and 2000s serve as prime instances,” Timmer expounded.
While acknowledging the traditional role of gold, he contended:
It’s excessively deflationary and cumbersome for transactional use. Consequently, its predominant role for investors is as a store of value – this is a key reason for the frequent analogies drawn between bitcoin and gold.
Later in the week, Timmer continued his discussion about bitcoin on the same social media platform. “Drawing from data up to September, bitcoin maintains a positive correlation with equities, albeit to a lesser extent than other assets,” he observed. “How would bitcoin fit into a traditional 60/40 portfolio? In my opinion, it deserves a place in the alternatives bucket. While the correlation of bitcoin with the S&P 500 is diminishing in positivity, it isn’t showing much negative correlation elsewhere.”
Moreover, Timmer remarked that bitcoin is “inversely correlated with the U.S. dollar and Treasury bills.” He added: “It is surprising to find that it has no correlation with gold. This is troubling because it casts doubt on the argument that bitcoin and gold are in alignment. However, the silver lining is the preference for assets within the alternatives category to lack correlation with both the traditional 60/40 portfolio model and other alternative assets.” He concluded his analysis by suggesting: “If bitcoin and gold are allies playing in different arenas, then the situation is not entirely unfavorable.”
We invite your opinions on the views expressed by Fidelity’s Director of Global Macro regarding bitcoin and gold in the comment section below.
Table Of Contents
Frequently Asked Questions (FAQs) about Bitcoin as Exponential Gold
What is Fidelity’s Director’s view on Bitcoin?
Jurrien Timmer, the Director of Global Macro at Fidelity, regards Bitcoin as ‘Exponential Gold’, emphasizing its potential as a store of value and a hedge against currency debasement. He contrasts it with gold, noting Bitcoin’s unique position and its evolving correlations with equities and traditional assets in investment portfolios.
How does Bitcoin compare to gold according to Fidelity’s Director?
Timmer articulates that, unlike gold, which is seen as deflationary and unwieldy for transactions, Bitcoin is gaining traction as a store of value, similar to gold but with the benefits of a more exponential trajectory. He also points out the lack of correlation between Bitcoin and gold, suggesting they may be playing for the same team but in different games.
What does the Fidelity Director say about Bitcoin’s correlation with other assets?
According to Timmer, Bitcoin has a diminishing positive correlation with equities and is negatively correlated with the U.S. dollar and Treasury bills. Surprisingly, it shows no correlation with gold, which challenges the view of Bitcoin as digital gold, yet also indicates a beneficial diversification quality within an investment portfolio.
Where might Bitcoin fit in a traditional investment portfolio?
Timmer suggests that Bitcoin could be placed in the ‘alts’ or alternatives bucket of a traditional 60/40 investment portfolio. Despite its lessening correlation with the S&P 500, Bitcoin doesn’t show strong negative correlations with many other assets, indicating its role as a diversifying component in an investment strategy.
More about Bitcoin as Exponential Gold
- Fidelity’s Global Macro Director on Bitcoin
- Bitcoin vs. Gold: Fidelity’s Analysis
- Investment Strategies: Incorporating Bitcoin
- Understanding Asset Correlations with Bitcoin
- Bitcoin as a Store of Value: Expert Insights
- The Role of Bitcoin in Modern Portfolios
4 comments
Interesting take from Fidelity’s director there, I always thought of Bitcoin as just digital currency but ‘Exponential Gold’ really puts things in perspective.
Did he just say that Bitcoin is negatively correlated with the dollar, and t-bills? that’s news to me, thought it was the other way around.
wasn’t sure where bitcoin fit in a traditional investment portfolio, the Fidelity director’s comments definitely gave me some food for thought.
gotta say, i’m not totally convinced that bitcoin can be a store of value like gold, but Timmer makes some good points about its potential.