Fidelity Digital Assets believes that Bitcoin will become a steady asset despite its current price volatility.
The investment company recently released its first research paper on Bitcoin titled Bitcoin Investment Thesis: An Aspirational Store of Value. The thesis explains all the reasons why Fidelity believes that the king coin could be a store of value despite its price volatility.
According to the document, Bitcoin could serve as a long-term “insurance policy”. Even though its current volatility is higher when compared to other traditional assets, Fidelity believes that this would decline as demand increases. It also said new investment products could also bring down Bitcoin’s volatility.
Fidelity believes Bitcoin has all the characteristics of a store of value. “Many investors consider Bitcoin to be an aspirational store of value,” the document said, but it “has yet to be widely accepted as such.”
Unlike traditional assets that could be affected by inflation and other degrading factors, a store of value retains its value for a long time.
Anthony Pompliano, the co-founder of Morgan Creek Digital, shares the same views as Fidelity. He recently tweeted that “Volatility is only bad if it goes against you.”
Fidelity provided four reasons why Bitcoin could be a store of value for long-term investments. Two of the reasons include Bitcoin’s scarcity and its decentralized checks and balances.
Back in November, Fidelity Digital Assets received approval for Bitcoin custody services.
Image Credits: Pixabay