Jurrien Timmer, Director of Global Macro Fidelity Global Asset Allocation believes Bitcoin has evolved as an asset class over the years and currently behaving as digital gold. Timmer also said that Bitcoin could be used as a counterweight to future monetary inflation. The Macro head released a paper explaining various factors that make bitcoin a viable replacement to gold.
The official analysis report makes note of Bitcoin’s scarcity and its growing demand in the real world and how the supply-demand factor makes it one of the best hedging assets in coming years.
Timmer Suggest Investor Should Consider Adding Bitcoin to Their Portfolio
The Bitcoin analysis report put forward by Global Macro Head of Fidelity believes investors should consider adding Bitcoin to their stock and bond portfolio at 60/40.
some investors may wish to consider bitcoin, alongside other alternatives, as one component of the bond side of a 60/40 stock/bond portfolio.
Timmer believes now is the perfect opportunity to add Bitcoin to one’s portfolio given bond market interest rates have neared zero and in some cases even negative, thus Bitcoin could act as a portfolio diversifier. At the same time, Timmer also warned about Bitcoin’s volatility in the short-term saying,
I should reiterate that, so far, bitcoin has proven highly volatile. While the models I am using may indicate a rising bitcoin price over time, I expect the ride to be rather bumpy, even dismaying at times. Bitcoin’s volatility could have a consequential impact on a portfolio’s short-term results. Past performance is no guarantee of future results
Timmers’s comments come at a time when institutional adoption of Bitcoin is peaking up with the likes of MicroStrategy, Tesla, and Square Inc.’s continued purchases ranging in Billions. As of now, more than 15 publically traded companies have added Bitcoin to their company’s balance sheet and many others may join in the near future.