Fidelity's Global Macro Head Recommends Bitcoin Investment
Key Takeaways
- Fidelity’s Director of Global Marco published an 11-page research report on Bitcoin.
- The asset manager said that Bitcoin has evolved as “digital gold.”
- He recommended a BTC allocation alongside bonds in a 60/40, stock/bond investment portfolio.
The Director of Fidelity’s Global Macro Jurrien Timmer says that Bitcoin has evolved as a form of digital gold.
Fidelity Endorses Bitcoin
Timmer wrote a report titled, “Understanding Bitcoin,” weighing the pros and cons of investing in Bitcoin. He believes Bitcoin may make “one component of the bond side of a 60/40 stock/bond portfolio.”
The 60-to-40 ratio allocation in stocks and bonds, respectively, is a general rule followed by many asset managers.
Ever since the COVID-19 induced crash last September, the bond yields have slowed and despite the recent surge, there is little hope for better yields in the future. Currently, there is $18 trillion of negative-yielding debt floating around the world. Timmer sees Bitcoin and gold as alternatives to the bonds in a low yield environment.
Comparing the $160 trillion in stock markets and the $11 trillion-dollar valuation of gold’s market capitalization, Fidelity’s asset manager predicted a continued uptrend in Bitcoin.
Moreover, he also found on-chain demand based on Metcalfe’s Law in the increasing number of addresses and reduced supply after each halving event citing the Stock-to-flow model. In conclusion, Timmer found that the “bitcoin growth curve may still be in its early, exponential phase”
According to him, Bitcoin will become scarcer than gold, becoming a “more convex form of gold.” Still, the road won’t be straight up and investors may feel “dismaying at times” as well.
Fidelity Investments has a digital assets wing that provides custodial services to institutions and also allows trading of crypto shares on its brokerage platform.
Disclosure: The author held Bitcoin at the time of press.
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
Source: Read Full Article
