According to BlockBeats, Fidelity's Global Macro Director Jurrien Timmer has analyzed the dynamic relationship between Bitcoin and gold, suggesting that Bitcoin might soon outperform gold. Using data from Fidelity Management & Research Company and Bloomberg, Timmer examined the changing trends in the Sharpe ratios of these two assets, which measure risk-adjusted returns. He noted that their relative performance might be at a turning point.
Timmer highlighted the negative correlation between gold and Bitcoin, observing that their Sharpe ratios have alternated in leading positions recently. He commented, "It seems Bitcoin might take the lead next, as its Sharpe ratio is currently -0.40, compared to gold's 1.33. We may witness a shift from gold to Bitcoin."
The shared data indicated that gold's recent return was $22.51, while Bitcoin's was $13.22. Gold's return was magnified fourfold to reflect its lower volatility, whereas Bitcoin's return remained unadjusted.
Timmer also discussed the psychological and behavioral aspects of investing in Bitcoin, describing its volatility and unpredictability as inherent traits. He likened Bitcoin to having a "Dr. Jekyll and Mr. Hyde" dual personality. According to Timmer, Bitcoin performs best when both the money supply (M2) and stock market are expanding, due to its dual appeal as a speculative asset and a store of value. In contrast, he noted that gold offers more stability with its singular attribute. Timmer acknowledged Bitcoin's legitimacy in the current monetary landscape, calling it a "modern invention aspiring to be hard currency in an era of loose monetary policy."
