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

Jurrien Timmer, the global macro director at Fidelity, shared his thoughts on X, a social media platform, stating that consistent growth in the money supply typically leads to inflation, which supports the idea that gold and BTC can serve as hedges against a weakening currency.

Timmer expressed, “In order for the argument for store of value to gain momentum, we need to see continuous growth in monetary aggregates above average levels. Currently, we have not witnessed this, as the substantial increase in real M2 during the pandemic has quickly reversed due to the restrictive actions of the Federal Reserve. This indicates that gold and Bitcoin are speculative plays on potential future events rather than current realities.”

M2 is a measure of the money supply that includes cash, checking accounts, and other easily convertible deposits.

At the time of writing, Bitcoin is trading at $68,435, experiencing a nearly 4% decline in the past week. As the top-ranked crypto asset by market cap, its performance remains volatile.

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