New Fidelity report flags ‘stark contrast’ between Bitcoin and fiat currencies
Bitcoin futures (BTC ticker down $19,123) could “represent a stark contrast to the rest of the world,” predicts asset manager Fidelity Investments.
In a last research paper, “The Rising Dollar and Bitcoin,” published Oct. 10, the company’s crypto subsidiary, Fidelity Digital Assets, drew a line between Bitcoin and other currencies.
Bitcoin “does not correspond to another person’s liability:” Report
While optimistic views on Bitcoin are no stranger, Fidelity continues to publicly reaffirm its confidence in the largest cryptocurrency despite a bear market for almost a year. is now considered normal. In the new environment of high inflation, the fixed issuance and delivery of Bitcoin is of particular importance.
“Bitcoin may therefore soon find itself in stark comparison to the path that the rest of the world and all fiat currencies could be taking: namely, the increased supply path, creation of additional currencies, and expanding central bank balance sheets,” they explained. While the report’s title addresses the strength of the US dollar relative to other world currencies, it was the sterling crisis. which Fidelity highlighted as a kind of impossible event in a bitcoin standard.
In summary, the firm forecast predicts that “further monetary devaluation may be needed to ease the high debt burden of developed economies, while recent events in the UK have highlighted counterparty risk and liabilities in the system, prompting monetary intervention and doses of liquidity characteristics that will probably not go away any time soon.
Volatility remains crypto-sector base case
Elsewhere, Fidelity’s optimistic take on the current state of the Bitcoin network itself diverges from the nervousness of its crypto-sector peers.
The company’s research summary for the month of October found that the illiquid supply of BTC hit a ten-year high, as well as rising network fundamentals. Meanwhile, The Week On-Chain, on-chain analytics firm Glassnode concluded that volatility will likely be what sets Bitcoin apart going forward, with both actual and implied Option volatility falls to record lows of On-chain spending behavior diminishes at a decision point where spot prices intersect with the holder’s cost basis in the near term,” he concluded, summarizing the data points covered.