Bitcoin: Unique Digital Assets According To The Fidelity Digital Assets Report

Bitcoin, the world's largest crypto asset by market cap. (Photo; Doc. Unsplash)

JAKARTA Since its appearance in 2009, Bitcoin (BTC) has attracted the attention of many parties. The digital asset, which has a total supply of 21 million coins, is claimed to be a hedge against other assets. Until now, BTC has become the largest digital asset in the world based on its market capitalization of IDR 8.3 quadrillion according to CoinGecko.

Meanwhile, according to a recent report from investment giant Fidelity Digital Assets management, Bitcoin is recognized as a unique digital asset and needs to be evaluated separately when building a crypto investment portfolio.

Fidelity Digital Assets, which is the third largest asset manager in the world with managed funds of US$4.24 trillion (equivalent to Rp35.1 quadrillion), mentions the importance of Bitcoin in the crypto ecosystem. Their research reports state that projects other than Bitcoin require a different assessment.

"Investors should have two different approaches," said Chris Kuiper and Jack Neureuter, authors of the report.

The first approach considers Bitcoin as a rare monetary asset. Bitcoin was created to address the problem of digital scarcity and become a form of sensor-resistant digital money. In this case, Bitcoin is best understood as a store of value.

The second approach considers other digital assets that have properties such as venture capital. This means they have higher risk and greater potential returns, but are also more similar to venture capital investments than monetary assets.

Bitcoin Is Different From Other Crypto Assets

The Fidelity Digital Assets report emphasizes that Bitcoin stands alone in the crypto economy. No other blockchain can replace Bitcoin as a monetary asset as any modification will sacrifice decentralization and security. The authors of the report confirmed that Bitcoin is currently the most secure and decentralized monetary network.

The report also notes that Bitcoin has a strong network effect, making it the dominant monetary network in the crypto world. In addition, its ability to survive threats and attacks makes it stronger through what is known as the Lindy Effect.

In conclusion, the Fidelity Digital Assets report suggests that crypto investors should evaluate Bitcoin separately as a monetary asset before considering other digital assets that have higher risk and greater potential returns. This helps build a more balanced crypto investment portfolio that fits each other's investment goals.