Fidelity Discusses Bitcoin as Portfolio Insurance — Could Soon Stand in "Stark Contrast" to Path Fiat Currencies Take
Fidelity Digital Assets, a subsidiary of Fidelity Investments, says that bitcoin could be considered portfolio insurance. The firm notes that the cryptocurrency “may soon stand in stark contrast to the path that the rest of the world and fiat currencies may take — namely the path of increased supply, additional currency creation, and central bank balance sheet expansion.” Fidelity Says Bitcoin Could Be Portfolio Insurance
Fidelity Digital Assets, a subsidiary of Fidelity Investments, recently published a research study titled “The Rising Dollar and Bitcoin.” The research outlines “how bitcoin could be considered portfolio insurance” as the rising dollar impacts global currency markets.
“The strengthening U.S. dollar is wreaking havoc among other countries and may put pressure on the Federal Reserve to soon reverse its tightening monetary actions, something that has precedent based on 1985’s Plaza Accord,” Fidelity explained.
In addition, “more monetary debasement may be needed to alleviate the high debt load among developed economies,” the report details, adding that “recent events in the United Kingdom have shown counterparty and liability risks in the system, making monetary intervention and doses of liquidity features that are not likely to go away any time soon.” The firm continued: Comparatively, bitcoin remains one of the few assets that does not correspond to another person’s liability, has no counterparty risk, and has a supply schedule that cannot be changed.
“Therefore, bitcoin may soon stand in stark contrast to the path that the rest of the world and fiat currencies may take — namely the path of increased supply, additional currency creation, and central bank balance sheet expansion,” Fidelity clarified.
“While the U.S. dollar remains very strong relative to other fiat currencies, the reality of the U.S. financial system is that it is in a similar position as the U.K. in the long run,” Fidelity asserted, elaborating: With the high debt-to-GDP ratio it is unlikely to be equipped to handle higher real interest rates for a sustained period of time if the country aims to fulfill its current debt obligations.
Fidelity Digital Assets has been ramping up its crypto services. The firm will start offering ether (ETH) trading and custody on Oct. 28. It also recently announced the launch of an Ethereum index fund, citing client demand for exposure to digital assets beyond bitcoin. Tags in this story bitcoin no counterparty risk, bitcoin unique, fidelity, fidelity bitcoin, Fidelity bitcoin insurance, Fidelity bitcoin unique, Fidelity central banks bitcoin, Fidelity Digital Assets, Fidelity ether, Fidelity ethereum, Fidelity Fed bitcoin, Fidelity monetary debasement bitcoin, Fidelity US debt bitcoin
Do you agree with Fidelity on bitcoin as portfolio insurance? Let us know in the comments section below. Kevin Helms
A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. Turkey Seizes $40 Million in Crypto, Detains 46 Suspects in Criminal Investigation: Report FEATURED | 2 days ago JPMorgan Hires Former Executive of Bankrupt Crypto Firm as Head of Digital Assets Regulatory Policy FEATURED | 3 days ago
Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleA Look at the First Phone-to-Phone Bitcoin Transfer Using a Nokia N900 Smartphone Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItFidelity Investments Launches Crypto, Metaverse ETFs — Says "We Continue to See Demand"
Fidelity Investments, one of the largest financial services firms with more than $11 trillion under administration, is launching exchange-traded funds (ETFs) focusing on the crypto ecosystem and the metaverse. "We continue to see demand, particularly from young investors, for access ... read more.SEC Risks Violating Admin Procedure Act by Rejecting Spot Bitcoin ETFs, Says Grayscale Privacy-Centric Monero Plans for July Hard Fork, Plans Include Ring Signature, Bulletproof Upgrade Digital Ruble ‘Much Needed,’ Russia’s Central Bank Says, Won’t Delay Testing Terra"s Algorithmic Dollar-Pegged Crypto UST Is Now the Third-Largest Stablecoin