Fidelity Investments has been a frontrunner in exposing its customers to the bitcoin and cryptocurrency asset class. But the head of the multi-trillion-dollar asset management firm’s digital asset arm Tom Jessop thinks BTC is ‘not quite there’ as a store of value because of its sporadic volatility.
Speaking to the Reuters Global Investment Outlook Summit 2020, Jessop, the lead at Fidelity Digital Assets, said that bitcoin has still not attained the ‘store of value’ status. But BTC investors are nonetheless optimistic that one day it will.
We use the word ‘potential store of value’ as bitcoin is still extremely volatile, and by any standard perhaps would not achieve the mantle of a true store of value… But aspirationally it is, and that’s one of the reasons why so many investors are now thinking about this space constructively.
This argument makes sense as the top cryptocurrency’s price action has been nothing less than a roller coaster ride. In a span of just 8 months (since March’s Black Thursday crash), bitcoin has logged near 400 percent gains. But in its relatively nascent existence, BTC had also lost value upwards of 90 percent (after the 2017 boom).
Still, the asset has experienced an upsurge in demand due to its inflation-resistant nature.
With governments and central banks in full stimulus mode, some observers reckon bitcoin is a useful safeguard against inflation. Since supply is capped at 21 million, these people believe its scarcity gives it an innate value.
Tom Jessop may have reservations against bitcoin’s store of value narrative. But his company nonetheless is touting the asset in every major way possible.
As reported by CryptoPotato, Fidelity released its Bitcoin Investment Thesis in October. The document presented compelling arguments as to why a trillion-dollar BTC market is not totally out of the question. The Boston-based firm observed that bitcoin’s strength lies in its low correlation with any other asset within an investment portfolio.
This, according to Fidelity, presents a favorable scenario for investors. As for them, bitcoin becomes an alternative asset. One that allows holders to protect their wealth by exposing themselves to a commodity for which the risk doesn’t depend on what happens to other markets.
Also, the fund management firm with an AUM worth $3.3 trillion partnered with Singapore based Stack Funds to enable wealthy Asian investors to freely and securely buy bitcoin.
According to a recent report, Stack Funds will make Fidelity’s secure custody services available to its clients, primarily based in Asia. Stack further explained that all assets under its management would be audited monthly. The firm will provide insurance coverage, weekly contributions, and redemptions to enhance capital security.
