Fidelity: It's Time for Gold to Pass the Baton to Bitcoin
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Fidelity Macro Director Jurrien Timmer believes that it may be Bitcoin's turn to take the lead. The Fidelity executive believes that gold may pass the baton to its digital rival in the near future based on the Sharpe ratios of the two assets.
Quoted from U.Today, Sunday (4/5/2025), Bitcoin's Sharpe ratio is currently at -0.40, which means that gold has actually provided a lower return than the risk-free rate. At the same time, gold, which has a Sharpe ratio of 1.33, has significantly outperformed Bitcoin while exposing its investors to a lower level of risk.
The Sharpe ratio is a measure of risk-adjusted investment performance. The formula is the difference between the investment return and the risk-free return, divided by the standard deviation of the investment return.
The Sharpe ratio helps investors see how much return they get for every unit of risk taken.
The leading cryptocurrency is down 17% against gold this year, with the latter benefiting from the economic turmoil caused by US President Donald Trump’s tariff war.
Bitcoin previously approached $98,000 on the Bitstamp exchange, hitting its highest level since late February.
Timmer believes that investors should own both gold and Bitcoin. He believes that investors should own both assets in a 4:1 gold-to-Bitcoin ratio.
However, according to the Fidelity executive, Bitcoin is a little different because it can act as both hard money and a speculative asset.
“Bitcoin is a little different from gold, because it has a Dr Jekyll & Mr Hyde personality where you never know which Bitcoin is going to show up at the party,” he said.
