Fidelity Thinks Bitcoin Is the Best Crypto

Fidelity – an investment platform – has called bitcoin a “superior” form of money, and it doesn’t think any other form of crypto is likely to surpass it.

Fidelity Thinks Bitcoin Is the Strongest Crypto

It’s unclear if Fidelity is a crypto fan or not, though it seems to recognize all the headway the currency has made in recent years. Not long ago, the company announced that many more countries are likely to follow in the footsteps of El Salvador, which was the first nation in the world to declare bitcoin legal tender. Individuals can now walk into any store or company and offer bitcoin – along with fiat – for products and services.

Fidelity explained that it feels many more businesses are likely to accept bitcoin as a form of payment and add the currency to their balance sheets. Now, in a 26-page report, Fidelity says that bitcoin is different from all other digital assets given that its technology was the first to be established in the blockchain industry. Fidelity believes this technology makes the asset not a superior payment method, but just a “superior form of money.”

The document reads:

No other digital asset is likely to improve upon bitcoin as a monetary good because bitcoin is the most (relative to other digital assets) secure, decentralized, and sound digital money, and any ‘improvement’ will necessarily face tradeoffs.

Among the asset’s top characteristics is its scarcity. This, Fidelity believes, makes the currency more like gold than any other asset on the market. It also combines storage, ease of use, and “transportability of fiat.” The report says that bitcoin is more like a monetary good in that it doesn’t pay a dividend or have cash flows.

Another big factor is that bitcoin is fully verifiable. It cannot be counterfeited like fiat currencies, and the idea that there are only 21 million BTC units out there and that the asset bears a limited supply will have positive effects on the market and make the currency rise even more in coming years. The report says:

The fact the market has shown a preference towards bitcoin, which is slower as a payment system compared to other digital assets and blockchains, signals the market currently values a highly secure and decentralized store of value rather than another payment network.

There Are Still Risks

Still, Fidelity fully admits that bitcoin has a lot of risks for investors. Its code can be subjected to various vulnerabilities, and several countries have worked hard to bring the asset down to a lower position. However, the report says many investors are likely downplaying the returns they can garner from bitcoin and other crypto assets. It reads:

If investors are looking for a digital asset as a monetary good, one with the ability to act as a store of value, then they will naturally choose the one with the largest, most secure, most decentralized, and most liquid network.

Source: Read Full Article