Fidelity Investment Researchers Say Bitcoin Is Superior

Fund management titan Fidelity Investments says bitcoin is a “superior form of money” and that investors overestimate its downside risks.

He shared this opinion in a bitcoin-first-revisited”>blog post by subsidiary Fidelity Digital Assets on October 4 that was written by analysts Chris Kuiper and Jack Neureuter.

They said the leading cryptocurrency’s status as a store of value elevates it to a special investment category that is out of reach of other crypto tokens.

“Not only do we believe that investors should consider bitcoin first to understand digital assets, but that bitcoin should be considered first and separated from all other digital assets that followed,” the researchers wrote in a white paper.

As the bitcoin network becomes larger, with more nodes and miners distributed across more people, entities, and geographic areas, attacking becomes more difficult and costly.

Read the full article below to see our take on bitcoin: https://t.co/orP9vNxDzZ pic.twitter.com/PyEje6shgl

– Fidelity Digital Assets (@DigitalAssets) October 5, 2023

They added that no other digital asset is likely to outperform bitcoin as a monetary good because bitcoin is, compared to other digital assets, the most secure, decentralized and robust digital money. Any “improvement” will potentially face trade-offs, they said.

bitcoin Competitors Are “Speculative Venture Capital Investments”

While newer competitors like ethereum have many more applications than the bitcoin network, none can match the dominant cryptocurrency, they said.

So while bitcoin is a monetary investment, Fidelity researchers suggest investors consider new crypto competitors as “speculative venture capital investments.”

“Investors should have two clearly separate frameworks for considering investing in this digital asset ecosystem,” they said. “The first framework examines the inclusion of bitcoin as an emerging monetary good, and the second considers the addition of other digital assets that exhibit properties similar to venture capital.”

Fidelity recently launched cryptocurrency broker accounts, which meet the needs of traders by allowing them to buy and sell bitcoin and ethereum along with stocks.

It also has specialized products including bitcoin investments in 401(k) plans that have caught the attention of regulators.

And it is among a group of leading fund managers applying to launch a spot bitcoin exchange-traded fund (ETF) in the US.

Despite the praise that researchers showered on bitcoin, they also warned investors about the risk that comes with the digital asset.

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