The main asset manager creates a Bitcoin comparison

Bitcoin is a currency of value and a warehouse of inflation, “toward an exponential gold,” Jurien Timmer, Fidelity's head of global macro, wrote in a post for X on Wednesday.

The analyst argued that both Bitcoin and gold boast unique but attractive risk/reward ratios, and that both could be players in the “same league” when it comes to investment considerations.

Gold vs. Bitcoin: A Historical Look

As noted by Timmer, Bitcoin started to rally again this year, conforming to a “pattern of previous boom and bust cycles.”

The asset regained $35,000 in BTC on Wednesday, with market participants cheering on the Bitcoin ETF's favorable position over the next two months. Also, the market's lack of confidence in long-dated Treasuries has seen its price combine with the price of gold, arguably rallying as a “flight to quality” for savers.

“Historically, in structural regimes where inflation is hot, real prices are negative, and/or money supply growth is excessive, gold will stand out relative to GDP and gain market share,” Timmer explained.

Investors often compare Bitcoin to gold for its strong financial properties, including its lack of reliability compared to fiat currencies. Some, like Michael Saylor, see Bitcoin as a better option for its digital benefits and early adoption cycle.

While Bitcoin remains more volatile than gold today, Timmer said on Thursday that this will work to his advantage during the rally. Comparing BTC's risk-reward to other asset classes as of 2020, he says the digital currency is “in a different universe.”

“Yes, Bitcoin is down 54% from its two-year high, but it's up 84% from its lows. “Government bonds can't hold a candle to that risk-reward balance and many other asset classes, at least at this point.”

Fidelity's Bull Case for Bitcoin

Fidelity has been pursuing digital asset unit crypto as an investable asset class for years, providing both custody and trading services for Bitcoin and Ethereum.

The asset manager is actively working with regulators to launch a Bitcoin ETF – an investment product expected to attract billions of dollars of institutional capital to Bitcoin. BlackRock is now competing with Fidelity, which analysts believe could be approved simultaneously for all applicants by early January.