Jurrien Timmer, Director of Global Macro at Fidelity, has expressed a stronger preference for Bitcoin over gold, despite both assets facing selling pressure amid a recent shift toward risk-averse behavior in financial markets.
Bitcoin and gold track equities amid market downturn
Timmer recently commented that Bitcoin’s relative price performance has been more resilient compared to gold, even as both assets have experienced declines. He emphasized that Bitcoin’s value remains steady in relation to gold, despite the broad market selloff.
Timmer posted, “I still prefer Bitcoin over gold for the time being, and its relative price is holding up even as both assets have sold off.”
The Fidelity executive also observed that Bitcoin and gold have become increasingly correlated with traditional equity markets in recent weeks. According to Timmer, both assets have mirrored stocks by participating in the risk-off trend prevailing in the markets.
“In the case of gold and Bitcoin, unfortunately, they have gotten more correlated to equities lately and have joined the risk-off party in recent weeks. Both assets are 60-70% correlated to the SPX right now,” Timmer explained.
Fidelity Investments is one of the largest asset managers globally, known for its asset management, brokerage, and retirement services.
Mini dictionary: SPX, short for the S&P 500 Index, is a widely followed benchmark representing the performance of 500 leading publicly traded companies in the United States.
| Asset | Recent Correlation with SPX | Recent Performance |
|---|---|---|
| Bitcoin | 60-70% | Down, but relative price strong vs. gold |
| Gold | 60-70% | Down |
| S&P 500 (SPX) | Base metric | Down |
Fed decision and macro outlook
In mid-October 2024, Timmer pointed out that Bitcoin could be entering a new four-year cycle bull market, referencing observed power law patterns in the asset’s price history. He noted that strong trends like this often begin without an obvious narrative to support them.
The broader cryptocurrency market displayed mixed trading on Saturday, with Bitcoin recording a slight decrease of 0.08% over the past 24 hours to $75,904. Investors are closely monitoring economic indicators, spurred by a US jobs report stronger than anticipated, raising expectations for another Federal Reserve rate cut at the next policy meeting in December.
The US unemployment rate declined to 4.1%. As a result, financial markets have increased the probability of a quarter-point rate adjustment at the upcoming December 9 Federal Reserve meeting to over 77%, compared to 66% the previous day.
However, attention is now turning to key inflation data, with both the Consumer Price Index (CPI) and Producer Price Index (PPI) reports due next week. Analysts note that these indicators, along with stabilization in the equities market, are expected to be decisive factors in the Fed’s next interest rate move.
