Fidelity Digital Assets president Tom Jessop says bitcoin is not yet a real store of value because the digital asset is still too volatile, Reuters reported. However, investors are optimistic that bitcoin will reach this status.
“We use the word ‘potential store of value’ because bitcoin is still highly volatile, and by any standard we might not achieve the mantle of a true value store,” Jessop told World Investment Forecast Summit- wide Reuters 2020 on Thursday.
“But it’s aspirational, and that’s one of the reasons why so many investors are now thinking about this space constructively.”
Bitcoin (BTC) reached an all-time high of $ 19,864 on November 30, driven by massive institutional demand. The asset rose about 47% in earnings last month, and is up more than 400% since the Black Thursday crash on March 12.
Institutional investors like Microstrategy, Square and others have shelved their way into crypto because they are convinced that bitcoin – with its highest supply cap of just 21 million coins – is a safe hedge against financial inflation, especially at a time of unlimited government spending.
But the digital asset has also led to a decline due to its volatility. For example, in 2017, bitcoin rose about 400% in just 35 days, before losing half its value within 30 days, Reuters reported. BTC recently lost $ 3,000 of its value in a matter of minutes after rallying strongly.
However, Jessop’s comments appear in contrast to Fidelity Digital Assets’ deep involvement in the cryptocurrency business. The company, a $ 3.3 trillion asset manager unit, Fidelity Investments, offers crypto trading and custody services to financial companies and corporations.
In October, Fidelity released its Bitcoin Investment Thesis, which generally supported bitcoin as a viable investment option. The company has also expanded its crypto trading and custody services to Europe and Singapore citing “significant interest”.
What do you think of bitcoin’s value status repository? Let us know in the comments section below.
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