Fidelity Global Macro Director: Bitcoin May Surpass Gold Dominance Anytime
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The Global Macro Director at Fidelity Investments recently published an article analyzing the dynamic relationship between Bitcoin and gold. Timmer referred to data from Fidelity Management & Research Company (FMR Co) and Bloomberg, examining the changing trends in the Sharpe ratio (a measure of risk-adjusted returns) of both assets, and noted that their relative performance may be at a turning point. Timmer stated: "Ironically, there is a negative correlation between gold and Bitcoin. As shown in the chart below, the Sharpe ratio of these two assets has recently alternated in leading... It seems that Bitcoin may lead next, as the current Sharpe ratio is -0.40, compared to gold's 1.33. Therefore, we may witness the baton being passed from gold to Bitcoin." The chart shared by Timmer shows that the recent return for gold is $22.51, while Bitcoin is $13.22, with gold's return magnified 4 times to reflect its lower volatility, while Bitcoin's return remains unadjusted at 1 time.
