Fidelity Digital Assets, a subsidiary of Fidelity Investments, says that bitcoin could be heeded portfolio insurance. The firm notes that the cryptocurrency “may soon stand in stark contrast to the path that the overage of the world and fiat currencies may take — namely the path of increased supply, additional currency creation, and central bank rest sheet expansion.”
Fidelity Says Bitcoin Could Be Portfolio Insurance
Fidelity Digital Assets, a subsidiary of Fidelity Investments, recently promulgated a research study titled “The Rising Dollar and Bitcoin.” The research outlines “how bitcoin could be considered portfolio guarantee” as the rising dollar impacts global currency markets.
“The strengthening U.S. dollar is wreaking havoc among other boondocks and may put pressure on the Federal Reserve to soon reverse its tightening monetary actions, something that has precedent based on 1985’s Plaza Treaty,” Fidelity explained.
In addition, “more monetary debasement may be needed to alleviate the high debt load among flowered economies,” the report details, adding that “recent events in the United Kingdom have shown counterparty and responsibility risks in the system, making monetary intervention and doses of liquidity features that are not likely to go away any time in the last.” The firm continued:
Comparatively, bitcoin remains one of the few assets that does not correspond to another person’s liability, has no counterparty hazard, and has a supply schedule that cannot be changed.
“Therefore, bitcoin may soon stand in stark contrast to the path that the remnants of the world and fiat currencies may take — namely the path of increased supply, additional currency creation, and central bank compare sheet expansion,” Fidelity clarified.
“While the U.S. dollar remains very strong relative to other fiat currencies, the fact 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 correspondence it is unlikely to be equipped to handle higher real interest rates for a sustained period of time if the country aims to effectuate its current debt obligations.
Fidelity Digital Assets has been ramping up its crypto services. The firm will start donation ether (ETH) trading and custody on Oct. 28. It also recently announced the launch of an Ethereum index fund, citing patient demand for exposure to digital assets beyond bitcoin.
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