Bitcoin: Missing out on its high growth potential?
An expert says Bitcoin’s value proposition as a decentralised and censorship-resistant monetary network distinguishes it from others.
Chris Kuiper, Head of Research at Fidelity Digital Assets, believes BTC should be treated separately from other digital assets. It should play a unique role in investors’ portfolios, he says.
Fidelity Digital Assets’ latest report, titled Bitcoin First, addresses two major concerns that clients have expressed about BTC. Replacement with other cryptocurrencies in the future and have less upside potential than other coins.
According to Kuiper, as the most decentralised and censorship-resistant monetary network, BTC provides a unique value proposition. That, he claims, is a non-incremental type of innovation akin to the invention of the wheel.
“You can’t reinvent something that’s already been invented in terms of the most secure, most decentralized. (BTC is) what we consider as the best monetary good in the digital asset space,” he says.
While other cryptocurrencies may have greater upside potential, as Kuiper points out, they also carry greater risks. They should be treated more like venture capital bets.
High growth coming
Kuiper believes that regardless of how the blockchain ecosystem develops in the future, BTC will come out on top. In a multi-chain scenario, where multiple blockchains coexist, Bitcoin will continue to serve as the primary “money anchor” for other digital assets.
“At the end of the day, the thing that gives these other tokens or projects value is that they can somehow tie back to bitcoin. Conversion back to Bitcoin (is another aspect),” he explains.
However, in the event of a winner-takes-all scenario, Kuiper believes BTC will be the protocol of choice for most blockchain applications.
Kuiper also points out that BTC’s thirteen-year existence has seen a significant reduction to the downside risks primarily associated with BTC investments.
On the other hand, its upside potential remains significant, particularly if it gradually replaces gold as a store of value.