Fidelity Global Macro Director: Bitcoin May Surpass Gold's Dominance at Any Time

Jurrien Timmer, the Director of Global Macro at Fidelity Investments, recently published an article analyzing the dynamic relationship between Bitcoin and gold. Timmer referenced data from Fidelity Management & Research Company (FMR Co) and Bloomberg, examining the trend changes in the Sharpe ratio (a measure of risk-adjusted return) of the two assets, and noted that their relative performance might 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 ratios of these two assets have alternated in leading recently... It seems that Bitcoin might be taking the lead next, as its current Sharpe ratio is -0.40, compared to gold's 1.33. Therefore, we might witness a handover of the baton from gold to Bitcoin." The chart shared by Timmer shows that the recent return for gold is $22.51, while Bitcoin's is $13.22, with gold's return magnified by 4 times to reflect its lower volatility, whereas Bitcoin's return remains unadjusted at 1 time.