Bitcoin could be a promising wealth accumulator and insurance against the backdrop of the current financial system’s problems, according to a Fidelity Digital Assets report.
Fidelity Digital Assets, a division of investment firm Fidelity Investments, presented a paper that considered the feasibility of investing in bitcoin. Analysts believe that the first cryptocurrency has the basic characteristics of a store of value.
Many investors have begun to view Bitcoin as a “safety cushion” in the event of unforeseen financial difficulties. However, officially bitcoin cannot yet be considered a store of value, which prevents its mass distribution.
According to analysts, a decentralized settlement system and a limited number of coins are the key advantages of Bitcoin over other means of accumulation. Also, investors and developers are interested in volatility, despite the fact that critics call exchange rate volatility a negative factor.
In addition, experts from Fidelity Digital Assets have expressed concerns about the active issuance of fiat money by central banks due to the financial crisis that arose as a result of the pandemic. The implications of record low interest rates and fiscal stimulus are unknown.
If you compare dollars and bitcoin, it turns out that the market is flooded with dollars, and this greatly undermines investor confidence in the traditional economy. At the same time, it became more difficult to mine bitcoins after the May halving , which increases their value in the eyes of investors and fuels interest in the first cryptocurrency.
The researchers mentioned another long-term factor in Bitcoin’s adoption – the possibility of its inheritance. The above circumstances do not guarantee that bitcoin will become a store of value, but together these factors can increase the demand for the first cryptocurrency.
Recall that according to The Tokenist, the rise in unemployment in the United States has noticeably changed the public’s attitude towards Bitcoin. 45% of millennials would prefer to invest in bitcoin over stocks, real estate or gold.