Chris Kuiper (Head of Research at Fidelity Digital Assets) believes that Bitcoin (BTC), should be treated as an individual asset and should not be mixed with other digital assets. He also believes that it is an important part of investors’ portfolios.
Fidelity Digital Assets’ most recent report, Bitcoin First, addresses two major concerns that Fidelity clients have about BTC. They fear it will eventually be replaced by other cryptocurrencies with lower upside potential.
Kuiper believes that BTC is the most decentralized, censorship-resistant and valuable monetary network. This, Kuiper says, is an incremental type of innovation that’s similar to the invention the wheel.
He stated, “You cannot reinvent something that has already been invented in terms the most secure and most decentralized as well as what we consider the best monetary good within the digital asset space.”
Kuiper noted that while other cryptocurrency may offer higher upside potential than others, they also come with higher risks. Therefore, it is important to treat them more like venture capital investments.
Kuiper believes that BTC will win regardless of how the blockchain ecosystem develops in the future. Bitcoin will still be the “money anchor” of digital assets in a multi-chain environment, where multiple blockchains can coexist.
He explained that the only thing that gives these tokens or projects any value is their ability to tie back to Bitcoin, or be converted back into Bitcoin.
Kuiper believes that BTC will be the preferred protocol to build most blockchain applications in a winner-takes all scenario.
Kuiper also pointed out that BTC’s 13 years of existence have greatly reduced the downside risks associated with BTC investments. However, the upside potential of BTC is still significant, particularly if it gradually replaces gold as a store-of-value.
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