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Jurrien Timmer: Understanding Bitcoin

March 2021

Among an increasing number of investors and portfolio managers, Bitcoin is considered a legitimate and distinct asset class. Jurrien Timmer, Director of Global Macro, Fidelity Investments, summarizes Bitcoin’s evolution and why it may be considered, alongside other alternatives, as part of an investment portfolio.

Highlights

  • Bitcoin, by design, is a finite asset, with both a unique supply and a unique demand dimension, and as its network increases, bitcoin’s value and durability could increase even faster.
  • Seen as a form of “digital gold,” bitcoin may act as a stable store of value and potentially offer protection against inflation—and even hyperinflation.
  • Bitcoin, however, faces risks from volatility, competitors, substitutes, regulation, and other factors; further, bitcoin may not be an appropriate or prudent diversifier for all portfolios.
  • In my view, some investors may wish to consider bitcoin, alongside other alternatives, as one component of the bond side of a 60/40 stock/bond portfolio.

Authors

Jurrien Timmer
Jurrien Timmer Director of Global Macro
Jurrien Timmer is Director of Global Macro at Fidelity Investments. In this role, he is part of Fidelity’s Global Asset Allocation group, where he specializes in asset allocation and global macro strategy.

Before assuming his current position, Mr. Timmer held various senior roles within Fidelity, including portfolio manager, director of market research and technical research analyst. Before joining Fidelity in 1995, Mr. Timmer was a vice-president in the fixed-income group at ABN AMRO. He has been in the investments industry since 1985.