- Researchers at Fidelity Investments are doubling down on their belief in Bitcoin by describing it as a “superior form of money” that provides a value not replicated by other tokens.
- The value of Bitcoin has historically moved in the same direction as other risk assets over time, and these assets have been impacted by the Federal Reserve’s interest rate hike campaign.
- Fidelity researchers acknowledged that Bitcoin investments come with risks, but they argued that investors tend to “overstate Bitcoin’s negative risks” compared to other digital assets.
Fidelity Investments researchers think the risks for Bitcoin are exaggerated, emphasizing that Bitcoin is a superior form of money.
Fidelity Investments Researchers Release Bitcoin Report
Researchers at Fidelity Investments, one of the world’s largest asset managers, are bolstering their belief in Bitcoin by describing it as a “superior form of money” that provides a unique value not replicated by other tokens.
In a whitepaper published last week, Chris Kuiper and Jack Neureuter stated that Bitcoin’s position as a “monetarist commodity” and store of value places it in a different investment category than other tokens, which exhibit venture capital-like characteristics.
Bitcoin’s recent success as a store of value is, of course, highly contentious. The token has performed well this year, seeing a 63% increase to around $27,000 after staying within a specific range for several weeks. However, it is still significantly below the approximately $64,000 peak in November 2021.
The value of Bitcoin has historically moved in the same direction as other risk assets over time, and these assets have been impacted by the Federal Reserve’s interest rate hike campaign. Since its creation in 2009, developers have created dozens of imitations of Bitcoin. They have also created networks like Ethereum, which, although they share similar features with the Bitcoin network, can be used as a kind of decentralized internet capable of hosting applications that are not possible with Bitcoin, according to supporters.
For investors interested in digital assets, Fidelity researchers suggested thinking of these new networks more as speculative venture capital investments, while they argued that Bitcoin can be considered a form of monetary instrument.
Fidelity Continues Its Commitment to the Crypto Industry
Fidelity has made substantial investments in the long-term success of the crypto industry. Recently, they introduced crypto broker accounts, allowing investors to purchase stocks as well as Bitcoin and Ether through these accounts. They have also allowed companies to offer Bitcoin investments in 401(k) plans, a move that has garnered regulatory responses. Fidelity regularly lobbies Congress on crypto regulations and is among the companies looking to launch a spot Bitcoin exchange-traded fund (ETF) in the United States.
Fidelity researchers acknowledged the risks associated with Bitcoin investments but argued that, compared to other digital assets, investors tend to “overstate Bitcoin’s negative risks.” They wrote that considering Bitcoin’s resilience and its ability to withstand traditional financial crises, investors should first understand Bitcoin and consider it separately from all other digital assets that follow.
