Fund Management Titan Fidelity Says Bitcoin Is A “Superior Form Of Money”

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

It shared this view in a blog post by subsidiary Fidelity Digital Assets on Oct. 4 that was written by analysts Chris Kuiper and Jack Neureuter.

They said the bellwether cryptocurrency’s status as a store of value elevates it to a special investment category that’s out of the 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 separate from all other digital assets that have followed it,” the researchers wrote in a whitepaper.

As the Bitcoin network becomes larger, with more nodes and miners distributed among more people, entities, and geographic areas, it becomes harder and more expensive to attack.

Read the full article below to see our view 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 improve upon Bitcoin as a monetary good because Bitcoin is, relative to other digital assets, the most secure, decentralized, sound digital money. Any “improvement” will potentially face trade-offs, they said.

Bitcoin Competitors Are ”Speculative Venture-Capital Investments”

While newer competitors like Ethereum have a lot more applications than Bitcoin’s network, none can match the dominant cryptocurrency, they said.

So while Bitcoin is a monetary investment, Fidelity’s researchers suggest that investors consider such newer crypto competitors as “speculative venture-capital investments.”

“Investors should hold two distinctly separate frameworks for considering investment 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 venture capital-like properties.”

Fidelity recently launched crypto broker accounts, catering to the needs of traders by allowing them to buy and sell Bitcoin and Ethereum together with stocks.

It also has specialized products that include Bitcoin investments in 401 (k) plans which have drawn the attention of regulators.

And its among a group of leading fund managers that are applying to launch spot Bitcoin exchange-traded fund (ETF) in the US.

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

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