Bitcoin is an “aspirational store of value” and an “insurance policy” contrary to an increasingly precarious financial system, according to another report by Fidelity Digital Assets, an arm of Fidelity Investments, which holds more than $8 billion in assets.
The analysis, Bitcoin Investment Thesis: A Aspirational Store of Value, states the Top crypto fulfills the criteria for being hailed as a shop of value but hasn’t yet attained the Essential degree of approval: “Many investors consider bitcoin to be an aspirational store of value in that it has the properties of a store of value but has yet to be widely accepted as such.”
It states the attributes giving it the capacity to be a traditional store of value are its own decentralized settlement system and its digital lack as a native advantage. In Addition, It states bitcoin’s volatility, that Is Often phased out in discussions concerning if bitcoin is a shop of value, can spur adoption because it “attracts attention, development and innovation.”
John Pfeffer of Pfeffer Capital LP, who is quoted in the report, says, “Most people in the world don’t yet see bitcoin as digital gold. As soon as people see it in a different way, the price will adjust.”
Fidelity’s report also focuses on concerns arising from excessive money printing in reaction to the Covid-19 financial crisis, which it says is undermining confidence in the system: “External forces that are accelerating interest and investment in bitcoin include unprecedented levels and exotic forms of monetary and fiscal stimulus globally with unknown consequences. This is exacerbating the concerns that bitcoin was designed to address and is leading more investors and users towards bitcoin as an ‘insurance policy’ that may provide protection against the unknown consequences.”
A quote from John Vincent of Wakem Capital Management highlights the sharp contrast between money printing and the recent bitcoin block reward halving: “You don’t need to be a PhD to understand that the number of dollars just doubled whereas the BTC supply just halved.”
Venture capitalist and veteran bitcoin advocate Chamath Palihapitiya is also quoted: “You quietly over some period of time accumulate a position and then just never look at it again and hope that that insurance under the mattress never has to come due. But, if it does, it will protect you.”
The report also points to the transfer of wealth from the baby boomers to the millennials as a potential adoption driver sinceas digital natives “younger people view bitcoin more favorably.”
The report concludes: “While bitcoin is not guaranteed into succeed because of shop of value, if sustainable long-term need for its use situation not materialize, the tailwinds mentioned previously should induce incremental requirement for a publication asset with particular properties.
“Additionally, bitcoin’s strength is that it has properties that allow it to serve multiple functions, further hardening the likelihood of its success as measured by growth in value.”