Bitcoin

BTC White paper Fidelity


https://institutional.fidelity.com/app/l...html?pos=T

> Before the days of fiat money—when the price of gold was mostly fixed—gold was money and
little more (exclusive of jewelry, medicine, electronics, and other commercial uses). Without the
ability to compound, gold did not stand a chance against equities except during periods of high
inflation or, more so, hyperinflation. But that changed during the 1970s when the gold price was
allowed to float freely and reflect monetary conditions around the world. Whereas in the old days
bonds beat gold 2-to-1, since 1970, gold and bonds have been neck-and-neck in terms of returns.

Which brings me to the 60/40 paradigm. If gold is now competitive with bonds, and bond yields
are near zero (or negative), could it make sense to replace some of a portfolio’s nominal bond
exposure with gold and assets that behave like gold? Many have already done so, whether via
inflation-protected Treasuries, low-duration bank loans, or commodities—and opportunity cost
of such a shift has become less and less. In my view, the only question may be, how much?

If bitcoin is a legitimate store of value, is scarcer than gold, and comes complete with a
potentially exponential demand dynamic, then is it now worth considering for inclusion in
a portfolio (at some prudent level and at least alongside other alternatives, such as real estate,
commodities, and certain index-linked securities)? Despite the many risks discussed—including
such factors as volatility, competitors, and policy intervention—for some the answer may well
be “yes,” at least insofar as that “yes” applies only to components on the 40 side of 60/40.
For those investors, the question of bitcoin may no longer be “whether” but “how much?