Fidelity Digital Assets, the investment firm’s (Fidelity Investments) cryptocurrency division, recently published a study article titled “The Rising Dollar and Bitcoin” that distinguished between Bitcoin and other currencies. Analysts detailed how much Bitcoin has deviated from what is now thought to be the standard in the report. The fact that Bitcoin has a fixed issuance and supply is particularly significant in the current high-inflation scenario.
Despite the nearly one-year-long bear market, Fidelity continues to openly repeat its belief in Bitcoin, even if bullish views on the most prominent cryptocurrency are scarcely uncommon.
“Therefore, bitcoin may soon stand in stark contrast to the path that the rest of the world and fiat currencies may take – namely the path of increased supply, additional currency creation, and central bank balance sheet expansion.”
Fidelity emphasized the British pound crisis as the type of event that would be impossible on a Bitcoin standard, despite the report’s title focusing on the strength of the US dollar in comparison to other major foreign currencies.
In conclusion, the firm predicted that additional monetary debasement might be required to reduce the high debt loads in developed economies. The investment bank says that recent events in the UK have demonstrated systemic counterparty and liability risks, indicating the necessity of monetary intervention and doses of liquidity unlikely to disappear anytime soon.
“Comparatively, bitcoin remains one of the few assets that does not correspond to another person’s liability, has no counterparty risk, and has a supply schedule that cannot be changed.”
The company concluded that the crypto market is poised for instability after analyzing the information presented and noting that both realized and implied volatility for options had reached historic lows. Spot prices and the cost basis of the short-Term Holder intersect at this decision point, where on-chain spending behavior is concentrated.
According to Fidelity’s compilation of research for October, the illiquid supply of BTC reached a ten-year high, and network fundamentals were soaring. The firm’s upbeat assessment of the current status of the Bitcoin network itself contrasts with the anxiety of peers in the crypto sector.