Bitcoin [BTC] It has been nicknamed “digital gold” For various reasons. It has been a hot topic for many reasons, including its store of value and limited supply. Although it is similar to gold there have been some disagreements about the superiority of one asset over another. financial instrument. Others are more interested in Bitcoin’s volatile nature than gold.
Jurrien Teim, Director of Global Macro at Fidelity decided to offer his perspective in the face of this background. Timmer views both assets against fiscal supremacy as hedges. In the present state of the federal government, he said the price of money could be changed while the supply of money was increased.
This may seem plausible but there’s a significant risk of inflation, if the government keeps increasing the money supply. In the COVID-19 epidemic, for example, money increased dramatically. However, Federal Reserve measures reversed that trend.
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Bitcoins and Gold
Both Bitcoin and Gold need to be able to solidify their position as a store of value. He said,
“My sense is that for the store of value argument to really accelerate, we will need to see sustained above-trend growth in the monetary aggregates. So far, we have not seen that, with the massive spike in real M2 during the pandemic quickly reversing under the weight of a restrictive Fed. That tells me that gold and Bitcoin are a play on something that may happen but hasn’t happened yet.“
Timmer explains that bitcoin or cryptocurrency, in comparison to a digital imitative of gold is exponentially more valuable. According to him, this is because of its money and networking technology.
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Bitcoin stands out from gold because it is decentralized and immune against government interference. BTC’s price at the time of publication was $67.829.20 after a rise from $67.836 to $67.829.20 with a daily increase of 1.48 percent.
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Source: watcher.guru