Bitcoin
Bitcoin or gold? Fidelity’s top expert shuts down speculation
Gamza Khanzadaev
Bitcoin Poised for Explosive Growth, Says Fidelity Global Macro Director, But Not Yet
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In the ongoing debate on Bitcoin versus gold as a superior store of value, Jurrien TimmerDirector of Global Macro at Fidelity, provided analysis that sheds new light on this hot topic.
According to Timmer, both assets are often seen as hedges against fiscal dominance, where the government dilutes the value of money by increasing the money supply. He argues that this thesis is fundamentally sound, since sustained increases in the money supply typically lead to inflation. This correlation is evident when comparing the 10-year growth rate of the M2 money supply and the consumer price index.
Source: Jurrien Timmer
Timmer suggests that for Bitcoin and gold to truly solidify their role as stores of value, there needs to be consistent above-trend growth in monetary aggregates. However, he notes that this has not yet occurred. The dramatic increase in real money supply during the pandemic was quickly reversed by the Federal Reserve’s restrictive policies, suggesting that conditions expected to Bitcoin thrive as a competitive analogue of gold have not yet been achieved.
He also addresses the notion of cryptocurrency as “gold 2.0”, referring to it as “exponential gold” due to its combination of monetary properties and advanced network technology.
Bitcoin versus gold
The discussion that Bitcoin could surpass gold in market capitalization is not new and has been going on in the community since the cryptocurrency became public knowledge.
Not without reason, the first crypto transaction was a Times headline about the global financial crisis. With the introduction of the location Bitcoin ETFsThis debate has only intensified as hundreds of millions of people can now buy cryptocurrency the traditional way.
Currently, gold’s market capitalization is over $15.6 trillion, while Bitcoin’s is approximately $1.33 trillion. For the latter to equal the market value of gold, it would need to grow 11.72 times, reaching an estimated price of almost US$790,000 per BTC.
About the author
Gamza Khanzadaev
Financial analyst, trader and crypto enthusiast.
Gamza graduated in finance and credit with a specialization in securities and financial derivatives. He also completed a master’s program in banking and asset management.
He wants to help cover economic and fintech topics, as well as educate more people about cryptocurrencies and blockchain.