Fidelity’s Bitcoin Report: Why Should It Be Considered Separately from Other Cryptocurrencies?
Fidelity has published a comprehensive report on why investors should consider Bitcoin (BTC) from a distinct perspective compared to other cryptocurrencies. 2022 Year in Cryptocurrency can be summarized as a year filled with turmoil and scandals, marked by events such as the collapse of the Terra stablecoin and the bankruptcy of the FTX exchange. The most fitting title to describe 2022 would likely be ‘Centralized Players Exploiting Decentralized Assets.’ The rapid rise of cryptocurrencies and the increasing interest from investors led individuals and companies to explore opportunities in this field. As a result, various negative incidents occurred, such as providing credit to businesses that did not deserve it, creating their own crypto tokens, and sometimes stealing investors’ money. This situation once again highlighted the necessity for cryptocurrencies to be decentralized and remain outside the control of any individual or company.
Fidelity’s report indicates that Bitcoin represents the essence of decentralization and security, making these features a preferred digital asset for investors.
Characteristics That Differentiate Bitcoin
Kriptokoin.com has previously stated that the key features that distinguish Bitcoin from other cryptocurrencies include its unique decentralization and high level of security. Generally, important decisions such as the circulation of new tokens or the consensus mechanism to be used are left in the hands of a few selected community members, such as founders and developers. However, Bitcoin’s uniqueness lies in the absence of any individual or organization pulling the strings behind the scenes, especially considering the issues that affected some networks in 2022. Additionally, Bitcoin’s extensive global node network makes it significantly more secure than its competitors.
One of the most striking findings presented by analysts is the potential of Bitcoin’s characteristics that enable it to be regarded as a robust currency, namely its limited supply and high demand potential, positioning it as a ‘primary monetary good.’ Fidelity emphasizes that Bitcoin’s limited supply of 21 million tokens and increasing network effects could make it a preferred digital asset for investors. With its first-mover advantage, Bitcoin stands out as ‘the most secure, decentralized, and liquid network’ in the blockchain space. Analysts believe that as more people prefer Bitcoin over other cryptocurrencies, this will enhance its legitimacy, and as demand increases, Bitcoin will gain further value.
Bitcoin’s Unique Status and Future
With 2022 behind us, investors may be quite late in realizing that not every new cryptocurrency deserves a place in their portfolios. While many of these assets may appear to be cryptocurrencies, they actually function similarly to centralized Ponzi schemes. According to Fidelity’s research, there will likely not be another Bitcoin, and therefore Bitcoin is becoming an asset that should be prioritized more than all other digital assets.
Bitcoin investors can be assured that despite the transient effects of centralized actors in the coming years, the blockchain will remain resilient. Most importantly, Bitcoin’s potential to maintain its primary position among digital assets combines with the possibility of making it the most valuable digital asset of the future.
