Researchers at Fidelity Investments, a global asset management firm, are reaffirming their belief in bitcoin as they dub it a "superior form of money." In a recent white paper, Chris Kuiper and Jack Neureuter argue that bitcoin's status as a "monetary good" and store of value positions it differently from other tokens, which they liken to venture capital investments.
While bitcoin has experienced volatility in its value over time, it has shown promising performance this year, surging by 63% to reach approximately $27,000. However, it remains below its peak value of $64,000 in November 2021. Notably, bitcoin's value has often moved in correlation with other risk assets affected by the Federal Reserve's rate-raising campaign.
Since its inception in 2009, numerous bitcoin imitators have emerged, along with networks like Ethereum. While these alternative cryptocurrencies share similarities with bitcoin, proponents argue that they also possess the potential to serve as decentralized platforms capable of hosting applications that are not possible on the bitcoin network.
Exploring the Potential of Digital Assets
In the world of digital assets, it is crucial for investors to approach newer networks with a mindset akin to speculative venture-capital investments. This is the viewpoint shared by Fidelity researchers, who also emphasize that Bitcoin should be regarded as a monetary instrument.
Fidelity itself is deeply committed to the success of the crypto industry in the long run. The company has recently introduced crypto broker accounts, enabling traders to not only invest in stocks but also obtain Bitcoin and Ether. Furthermore, Fidelity has facilitated the inclusion of Bitcoin investments in 401(k) plans, although this move has faced regulatory scrutiny. Additionally, the company actively engages in lobbying Congress on matters related to crypto regulation and supports the idea of launching a spot Bitcoin exchange-traded fund in the United States.
While the researchers at Fidelity acknowledge that investing in Bitcoin carries risks, they argue that investors are exaggerating the potential downsides when compared to other digital assets. They express confidence in Bitcoin's longevity and resilience, particularly evident during times of turmoil in traditional finance.
The researchers go a step further by stating that Bitcoin should be the starting point for any investor seeking to understand digital assets. They emphasize that Bitcoin stands apart from all the other digital assets that have emerged in its wake.
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