New Fidelity Digital Assets Report Advocates Bitcoin Over Gold for Portfolio Diversification
Fidelity Digital Assets brought new light to the subject of cryptocurrency investments in its September 2023 study, focusing particularly on Bitcoin.
Authored by Chris Kuiper, Director of Research, and Jack Neureuter, Research Analyst, the report meticulously dissects why Bitcoin should be considered as a standalone asset class, separate from other digital assets.
"Bitcoin is better than gold," the report states, when it comes to fulfilling specific portfolio requirements.
In the Fidelity report, the unique aspects of Bitcoin are highlighted in comparison to traditional investment options like gold and stocks. One of the salient features is its limited supply, capped at 21 million coins.
This scarcity mimics the finite nature of precious metals, making Bitcoin a potential hedge against inflation. Unlike other digital assets that have indefinite supply mechanisms, Bitcoin's fixed limit sets it apart, offering an alternative for portfolio diversification.
The report also speaks of Bitcoin's resistance to "innovative destruction," a term often associated with emerging technologies that lose relevance due to newer, more efficient competitors. Bitcoin has managed to remain a dominant force in the industry, despite the introduction of various other digital currencies and blockchain projects.
Its decentralized nature, not governed by any single entity, gives it resilience against systemic risks that could otherwise plague centralized financial systems.
Fidelity's report delves deeper into Bitcoin's role as a store of value as well, asserting that its mathematical underpinning and cryptographic security features give it a distinct advantage.
While gold has been the traditional go-to asset for storing value, Bitcoin offers certain
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