Fidelity Investments, an asset manager, predicts that Bitcoin’s future (BTC) may be “in stark contrast to all the rest of the globe”.
Fidelity Digital assets, the crypto subsidiary of Fidelity, has drawn a line between Bitcoin and all other currencies in a recent research article, “The Rising Dollar and Bitcoin”, published Oct. 10.
Report: Bitcoin “doesn’t correspond to another person’s liability”
Fidelity, despite being a regular bull on Bitcoin, continues to publicly affirm its belief in the largest cryptocurrency despite a near year-long bearish market.
Analysts outlined how Bitcoin has changed from the norm as an asset in the report. Particular importance is given to Bitcoin’s supply and fixed issuance in the current high-inflation environment.
They explained that bitcoin could soon be in sharp contrast to the paths taken by the rest of the world, fiat currencies, and the path of increased supply and currency creation and central bank balance sheet expansion.
Related: Bitcoin price “easily” due to hit $2M within six years — Larry Lepard
The report’s title has an influence on the strength and relative value of the U.S. Dollar to other currencies. However, Fidelity highlighted the crisis in British Pound Sterling as the type of event that would be impossible under a Bitcoin standard.
The firm concluded that more monetary debasement might be necessary to reduce the high debt burden among developed economies. Recent events in the United Kingdom have revealed counterparty and liability risk in the system, making monetary interventions and doses liquidity features that are unlikely to disappear any time soon.
It concluded that bitcoin was “comparatively” one of few assets that doesn’t correspond to another person’s liability, has zero counterparty risk and has a supply plan that cannot be altered.
Investors and the market will ultimately decide if these properties become more appealing.
Screenshot of the Bitcoin monthly returns chart Source: Coinglass
Volatility is a crypto-sector base case
Fidelity’s positive assessment of the current state Bitcoin network diverges from that of its crypto-sector counterparts.
According to the firm’s October roundup, the BTC illiquidity reached a ten year high and network fundamentals were surging.
Cointelegraph reported that in its weekly newsletter “The Week on-Chain”, Glassnode, an on-chain analytics firm, concluded that Bitcoin’s future would likely be marked by volatility.
The Bitcoin market is ripe for volatility with realized and implied volatility falling to historic lows. It concluded that On-chain spending behavior is becoming more pronounced, with spot prices reaching a decision point where they intersect with the Short Term Holder cost basis,” summarizing all data points.
More broadly, traders are planning for a violent exit from Bitcoin’s limited trading range in the coming weeks.
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