Fidelity released a report on why Bitcoin should be considered separately from other digital assets, citing the token’s use as a secure, decentralized monetary good.
- Fidelity Digital Assets has released a new report outlining their thesis behind “Why investors need to consider Bitcoin separately from other digital assets,” which includes a review of the fundamental advantages offered by the top crypto and an overview of Bitcoin’s progress and position within the current digital asset market.
The report said it should be considered a monetary good because “Bitcoin clearly possesses a lot of good qualities of money, combining the scarcity and durability of gold with the ease of use, storage, and transportability of fiat .” “Bitcoin’s scarcity is underpinned by its decentralization and censorship-resistant characteristics,” they said. “These characteristics are hardcoded into Bitcoin and almost certainly will never be changed because the same people that ascribe value to Bitcoin and own it have no incentive to do so. In fact, network participants are incentivized to defend these very characteristics of a scarce asset and an immutable ledger.
“As more people believe Bitcoin has superior monetary properties and opt to store their wealth in it, demand increases. This, in turn, leads to higher prices,” the report said. “Miners are then incentivized to increase their capital expenditure and computing power as higher prices lead to higher profit margins. More computing power devoted to Bitcoin mining leads to higher network security, which, in turn, makes the asset more attractive, leading once again to more users and investors.
They further strengthened their argument by noting the “Lindy Effect,” a theory that the longer some non-perishable thing survives, the more likely it is to survive in the future.
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