Fidelity: Bitcoin is Like No Other Digital Asset
In a latest report, Fidelity Digital Assets, Fidelity Investments’ crypto branch, zooms in on Bitcoin (BTC) and makes a strong case for the top cryptocurrency despite its latest drawback to a valuation of under $40,000 per coin.
The firm’s analysts point to two main reasons why Bitcoin has to be considered differently than other crypto assets.
“Bitcoin’s return profile is driven by two strong tailwinds: the growth of the digital asset ecosystem and the potential instability of traditional macroeconomic conditions.
These return tailwinds are likely to be captured in an easier way with less risk than via the majority of other digital assets.”
The authors note that the Bitcoin network has longtime proven to be stable and secure.
“It is arguably the least likely protocol to encounter a major bug at this stage in its life given it has existed longer than any other project, holds an intentionally simplistic code and has a now $1 trillion bounty for anyone capable of exploiting it.”
In addition, Fidelity still believes in Bitcoin’s potential as a hedge against inflation.
“The increasing use of monetary and fiscal policy as a way to provide support for ongoing economic growth may give rise to concerns about the overall stability of the financial system and the ability for the economy to stand on its own.
These types of macro environments have historically tended to benefit scarce assets whose supply cannot be altered.
Bitcoin’s rule set, historical precedents, and decentralization have created the greatest level of scarcity of any digital asset protocol. This makes a compelling case as the greatest available hedge for some of the potential headwinds facing the legacy financial system.”
The reports concludes that Bitcoin is simply on another level when compared to other assets, nevertheless those cryptocurrencies have their own purpose in the wider crypto ecosystem.
“Bitcoin is fundamentally different from any other digital asset. No other digital asset is likely to improve upon Bitcoin as a monetary good… [but] the rest of the digital asset ecosystem can fulfill different needs or solve other problems that Bitcoin simply does not.”
In their 2021 annual report, Fidelity Digital Assets recently said it expects nation states and central banks to buy Bitcoin in 2022, incentivized by a high-stakes real life play of game theory.
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Source: igaming
