Fidelity predicts: Bitcoin could surpass gold's dominance at any time

Mars Finance News: On May 4th, Fidelity hinted that Bitcoin might soon take the baton from gold. Jurrien Timmer, Fidelity Investments' global macro director, recently published a detailed analysis of the dynamic relationship between Bitcoin and gold. He cited data from Fidelity Management & Research Company (FMR Co) and Bloomberg to analyze the changing trends of Sharpe ratios for both assets, pointing out that their relative performance may be at a turning point. "Ironically, there is a negative correlation between gold and Bitcoin. As the following chart shows, the Sharpe ratios of these two assets have been alternating in leadership," he commented, adding: "It appears that Bitcoin's moment of leadership may be next, as its Sharpe ratio is currently -0.40, while gold's is 1.33. Therefore, we may witness the passing of the baton from gold to Bitcoin." The chart he shared shows that gold's recent return was $22.51, while Bitcoin's was $13.22, with gold's return amplified by 4 times to reflect its lower volatility, while Bitcoin's return remained unadjusted at 1 times. Timmer also commented on the psychological and behavioral aspects of investing in Bitcoin. He described Bitcoin's volatility and unpredictability as its fundamental characteristics: "Bitcoin is slightly different from gold because it has a 'Jekyll and Hyde' dual personality." According to Timmer, Bitcoin performs best when the money supply (M2) and stock market expand simultaneously, thanks to its dual appeal as a speculative asset and store of value. Gold, he commented, "has only one attribute" and provides more stability. Timmer acknowledged Bitcoin's legitimacy in today's monetary landscape, calling it a "modern invention craving to become hard currency in an era of loose monetary policy".