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Bitcoin or gold? Top loyalty experts put an end to speculation
Gamza Khanzadaev
Bitcoin is poised for explosive growth, says Fidelity’s global macro director, but not yet
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In the ongoing debate of Bitcoin against gold as a superior store of value, Jurrien TimmerGlobal Macro Director at Fidelity, provided an analysis that sheds new light on this hot topic.
According to Timmer, both assets are often seen as hedges against fiscal dominance, in which 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 ten-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 consolidate their role as stores of value, constant, above-trend growth in monetary aggregates is needed. However, he notes that this has not yet happened. The dramatic increase in real money supply during the pandemic was quickly reversed by the Federal Reserve’s restrictive policies, suggesting that the conditions expected for Bitcoin thrive as a competitive analogue to gold have not yet been achieved.
He also addresses the concept of cryptocurrency as “gold 2.0”, instead 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 terms of market capitalization is not new and has been ongoing in the community since the cryptocurrency entered the public domain.
Not without reason was the first encrypted transaction a Times headline about the global financial crisis. With the introduction of commercials Bitcoin ETFsthis debate has only intensified as hundreds of millions of people can now purchase cryptocurrency the traditional way.
Currently, gold’s market capitalization stands at over $15.6 trillion, while Bitcoin’s is around $1.33 trillion. For the latter to match gold’s market capitalization, it would have to grow 11.72 times, reaching an estimated price of almost $790,000 per BTC.
About the author
Gamza Khanzadaev
Financial analyst, trader and cryptocurrency enthusiast.
Gamza graduated in Finance and Credit with a specialization in securities and financial derivatives. He then obtained a master’s degree in banking and asset management.
He wants to help cover economic and fintech topics, as well as educate more people about cryptocurrencies and blockchain.