A macro analyst from the investment firm Fidelity believes that in order to strengthen the argument that Bitcoin (BTC) and gold are reliable stores of value that can protect against inflation caused by governments, there must be a sustained increase in the money supply.

Jurrien Timmer, the global macro director at Fidelity, shared on the social media platform X that consistent growth in the money supply typically leads to inflation, supporting the idea that gold and BTC can act as hedges against devaluing currency.

Timmer stated, “In order for the store of value argument to gain momentum, we would need to see continuous growth in the monetary aggregates. Currently, we have not witnessed this, as the significant increase in real M2 during the pandemic quickly reversed due to the Federal Reserve’s tight policies. This indicates that gold and Bitcoin are speculative assets based on potential future scenarios rather than current realities.”

M2 is a measure of the money supply that includes cash, checking accounts, and other deposits that can easily be converted into cash.

At the time of writing, Bitcoin is priced at $68,435, showing a decrease of nearly 4% over the last week. As the top crypto asset by market cap, its performance is closely watched by investors.

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