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Director of Global Macro at Fidelity, Jurrien Timmer, has outlined  in a report titled “Understanding Bitcoin”, that the digital asset is seen as a form of “digital gold,” and that it may act as a stable store of value, potentially offering protection against inflation, and even hyperinflation.

What’s important to note is that Timmer does not even form part of the investment giant’s digital assets arm that  deals with crypto investments. It appears that the bullish narrative is spreading through various departments and not just in the digital assets arm.

Timmer highlighted that the supply of Bitcoin is limited. “Bitcoin supply, by design, is finite.” Only 21 million will ever be created. As the demand for Bitcoin continues to grow, the supply will remain fixed. This scenario does not apply to gold, as its annual production has remained steady throughout the years. It is safe to say that the digital asset will eventually become scarcer than gold. 

“We know that Bitcoin’s supply growth is flattening. Note how the production of gold has been quite steady throughout the years: No asymptote here!”

“In my view, some investors may wish to consider Bitcoin, alongside other alternatives, as one component of the bond side of a 60/40 stock/bond portfolio.” Said Timmer.

Timmer noted that the volatility of the Bitcoin may not be attractive for some investors, but he still believes that, over time, Bitcoin will take more market share from gold.

Feature image by Marco Verch from flickr