Cryptocurrency

Bitcoin is digital Gold for institutional investors

Bitcoin and the institutional investors to come closer to each other. Yesterday, we talked about the strong growth of Grayscale, and the increased demand from the institutional side. Now Fidelity Digital Assets, the subsidiary of the American investment company Fidelity Investments has published a report on Bitcoin and, in particular, on the Narrative of the store of Value (Store of Value, SoV). In the process, Fidelity has determined that Bitcoin will now be available as a digital store of value for investors is always interesting.

Bitcoin and its value retention functions

Fidelity Digital asset, was launched in October 2018 and has developed into a major player that offers the storage of crypto-currencies, and other services for large institutions. While the company was initially only in the United States, announced it in the last year, due to the growing demand for digital Assets, an Expansion to Europe.

In his most recent report on Bitcoin Fidelity Digital Assets, described the leading crypto-currency as an “up-and-coming store of value”. The company also pointed out that BTC is still in a relatively early stage of Mass adoption, which could offer investors substantial opportunities for profit. Fidelity is illustrated by the Growth of Bitcoin in the graphic below.

An analogy is that investing in Bitcoin is like investing in Facebook when the company had 50 million users and has the potential to grow to more than two billion users it has today.

This is driven by the idea that Bitcoin provides an asymmetric upward trend. If Bitcoin of private and institutional investors is widely accepted as a store of value, can be Pre-the increase in value in comparison to the initial investment to be substantial.

BTC will at some point join in addition to Gold

In the Report, the market share of BTC as a store of value was compared with the Gold. It was found that the precious metal is still the undisputed favorite among traditional investors. Especially in such uncertain and turbulent times, as is currently the case. The Position of Bitcoin could improve rapidly, however, as soon as the broad masses of the properties of BTC will be more aware of. This could have a dramatic effect on the price of BTC, said John pepper of pepper Capital LP:

Most of the people in the world don’t see Bitcoin as digital Gold. As soon as the people see it differently, and will adjust the price.

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Digital scarcity attracts

According to Fidelity, the digital scarcity is what most investors in Bitcoin the most attractive. After all, the oldest and most important crypto-currency has a maximum number of 21 million BTC.

The main features referred to in relation to a good a store of value function, scarcity, Transferability, durability, and divisibility. The most important of these features are the scarcity, which is for the long-term protection against the loss of purchasing power is essential for well-being. Scarcity means that there is a limited amount of Good. It can’t be created easily, and it is impossible to counterfeit it.

Therefore, the “forgery-proof digital scarcity” Bitcoin fits perfectly in the perception of a value storage system. John Vincent of Wakem Capital Management noted that the recent actions of the governments of the world, excessive amounts of Fiat printing currency, which would have clarified the qualities of Bitcoin by way of example.

The quantity of money is doubled – Bitcoins offer halved

With respect to the BTC Halving in may of this year, he said: “You have to be a doctor to understand that the number the US has doubled in dollars, while the BTC has been cut in half supply”.

The notorious volatility of Bitcoin was raised by opponents, often as an inherently negative characteristic, the traditional investors repels. The report from Fidelity admitted although actually, the high fluctuations, however, offered a contrasting approach:

A different perspective is that many of the participants to learn Bitcoin first, because of its volatility know. If new subscribers carry out further studies, to shift the perceptions are often that you concentrate to promise less on the short-term performance and more on long-term value.

The investment company also claimed that high fluctuations “could attract investment, development and Innovation”.

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The comments in this article do not represent any trading recommendations or investment advice.

About the author

Eve Manning

Eve Manning

A native Texan, Eve first started out as a Finance Analyst and later realized that her true passion was not in trading but in writing. She leverages her experience in the Finance industry to analyse and write in-depth news articles covering the Cryptocurrencies, Economy & Finance industries.

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