Fidelity - Understanding Bitcoin
Mr Timmer looks at macro considerations broadly, taking a historical approach to analyzing the effectiveness of various inflation hedge assets. The 12-page report looks at bitcoin's potential within this framework, starting with its fundamental properties, supply and demand drivers, and recent growth and validation as an asset class.
Topics covered include:
- About bitcoin: Prospects, prospectors, and portfolio managers
- Bitcoin Stock to Flow
- Metcalfe's Law
- Gold and bitcoin as a store of value
- BTC Valuation
- Equities as an inflation hedge
- Asset classes over time
EXCERPT
Among an increasing number of investors and portfolio managers, bitcoin is considered a legitimate and distinct asset class, and some may wish to consider bitcoin, alongside other alternatives, as one component of the bond side of a 60/40 portfolio.
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In my view, bitcoin has gone mainstream, already considered a legitimate asset class by more and more investors. I think bitcoin has both a compelling supply dynamic (S2F) and demand dynamic (Metcalfeβs Law). At close to $900 billion, bitcoin is still just a fraction of goldβs total global value of roughly $11 trillion, not to mention total global financial assets of $160 trillion.

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