Fidelity Digital Assets published a new Bitcoin investment thesis, pointing out why Bitcoin is an ‘aspirational store of value.’
The report states that Bitcoin meets all the basic concepts of meeting a store of value, but isn’t quite there yet, but believes it will grow to become one and even challenge gold as the ultimate store of value.
Bitcoin: An Aspirational Store of Value
Fidelity Digital Assets, a subsidiary of multi-trillion dollar investment firm Fidelity Investments, today published a nineteen-page investment thesis that lays out why they believe Bitcoin will become the ultimate store of value.
According to the thesis, Fidelity views Bitcoin as an ‘aspirational store of value’ and labels it as an ‘insurance policy’ against a troubled financial system.
The report, titled: Bitcoin Investment Thesis: An Aspirational Store of Value, claims that Bitcoin meets the basic test for a store of value, but still has to fully prove itself:
‘Many investors consider Bitcoin to be an aspirational store of value in that it has the properties of a store of value but has yet to be widely accepted as such.’
The report points out Bitcoin’s ‘decentralized settlement network and its digitally scarce native asset,’ as the main factor to which Bitcoin’s ‘potential’ as a store of value is being driven.
Bitcoin’s Volatility – A Net Positive
The report even dismisses the ‘volatility’ counterargument for why Bitcoin cannot be considered a store of value, claiming that it actually ‘attracts attention, development and innovation’ to Bitcoin.
The report also makes mentions the fact that governments are printing money at its fastest rate, suggesting many citizens are beginning to lose faith in their government monetary policy.
‘The unknown consequences of record low interest rates, unprecedented levels of global monetary and fiscal stimulus and deglobalization are all adding fuel to the fire of awareness and adoption [for Bitcoin].’
And who can argue with that. Bitcoin was created because of past monetary and fiscal failures from pretty much all governments.
Since coming out of the 2008 recession the US debt has more than doubled, and the purchasing power of the dollars we work hard for is diminishing.
All this plays into the hands of Bitcoin’s most novel innovation: ‘its unforgeable digital scarcity.’
You don’t have to be an economist to understand that as money is printed out of nothing the value of it will fall, especially against hard money such as Bitcoin, which has ironically just had 50% a cut in its inflation earlier this year.
It’s not just the government monetary policy that the report suggests will inspire Bitcoin adoption, but the transfer of wealth from older to younger generations.
As wealth is inherited from older generations, millennials are far more likely to invest in Bitcoin than almost any other asset.
The younger generation have an healthy level of distrust towards the bankers and its estimated they will inherit $68 trillion in wealth over the next decade, many of whom are more comfortable holding Bitcoin than legacy assets.
Fidelity Is Letting Its Own Secret Out
With over $8 trillion in AUM, Fidelity is one of the largest financial institutions in the world, and although the company’s pro-Bitcoin stance is common knowledge in the Bitcoin space, this publication is a very timely boost for the leading cryptocurrency.
It’s well known that Fidelity has been mining Bitcoin since 2015, and has made several investments in companies working within the Bitcoin infrastructure. And the financial giant launched its digital assets arm, Fidelity Digital Assets in October 2018.
Fidelity Is Telling Its Readership What We All Know
It’s no secret that Fidelity is interested in the Bitcoin space, and it has actively been investing in Bitcoin-related projects since as early as 2015.
But many of its investors wouldn’t have been aware. Fidelity could hardly have recommended Bitcoin to its well-oiled investors, with the possibility that it could drop 15% overnight.
Of course, this could happen and likely will again, but Fidelity had to come out eventually, and as bullish as the report is, I think the timing of it is more telling.
This tells me that Fidelity is confident that the Bitcoin bull season is here. Fidelity wouldn’t risk its own reputation without that faith, so I will leave you with the wise words of Satoshi Nakamoto:
“It might make sense just to get some in case it catches on. If enough people think the same way, that becomes a self-fulfilling prophecy.”