Why This Fidelity Investments Director Believes Bitcoin Is ‘Exponential Gold’
November 04 2023 - 11:00AM
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The Director of Global Macro at Fidelity Investments, Jurrien
Timmer, recently provided insights into the potential of the
flagship cryptocurrency, Bitcoin, and went as far as labeling the
crypto token as “exponential gold.” A Glance At Bitcoin’s Adoption
Curve In a post released on his X (formerly Twitter) platform,
Timmer mentioned that Bitcoin’s scarcity and adoption curve
potentially allow it to be a “high-powered hedge against monetary
shenanigans,” likely alluding to the fact that the token’s features
make it a great option to hedge against inflation. That is why he
sees the token as “exponential gold.” Related Reading: Legal Expert
Explains Why Ripple Will Always Back XRP Source: X He further
elaborated on Bitcoin’s adoption curve, stating that it has so far
followed a “typical S-curve shape,” which places it in good company
with other major innovations that went through such an adoption
journey. One of them is mobile phones, as Timmer noted that
Bitcoin’s adoption curve in 2020 resembled that of mobile phones in
the ‘80s and ‘90s. Source: X Bitcoin, however, seems to have
moved to another stage in the adoption curve, as Timmer stated that
the “real-rate narrative changed from dovish in 2020 to hawkish in
2022.” He further suggested that Bitcoin has moved past the stage
of a rapid rise as its adoption curve has flattened out. With this,
Timmer believes that it now shares similarities with the adoption
curve of the internet in the 2000s as the crypto token “has not
made much progress since 2021.” Bitcoin Volatility: Good Or Bad? In
a subsequent post, Timmer put Bitcoin’s volatility in perspective
as he compared it with other asset classes. First, he shared a
risk-reward chart for the pandemic and post-pandemic era ranging
from 2020 to this year. The SPX seemed to provide the best
risk-reward with close to 24% return. Source: X Timmer then
went on to share another chart, which included Bitcoin this time
around. The foremost cryptocurrency notably stood out from the
rest, as he mentioned that Bitcoin was “in a different universe,”
with a 58% return. Source: X Related Reading: Will Cardano
Replicate Solana’s Surge? Analyst Reveals Similarities For 80% Rise
Bitcoin’s high volatility seems to have contributed to such returns
in no small way, as Timmer mentioned that the crypto token’s huge
drawdowns also come with large gains. To drive home his point, he
shared another chart that showed drawdowns and rallies, which
various asset classes have experienced from their 2-year high and
low, respectively. Source: X The chart showed that Bitcoin
experienced a 54% drawdown from its two-year high but is also up by
84% from its low in the same period. This is more impressive
when one considers how other asset classes have fared in the same
period as Timmer stated that Government bonds “can’t hold a candle”
to Bitcoin’s risk-reward math. BTC jumps back to
$34,800 | Source: BTCUSD on Tradingview.com Featured image from
Capital.com, chart from Tradingview.com
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