Prominent asset manager Fidelity has highlighted Bitcoin unique features and functionalities in comparison to other cryptocurrencies in a recent report.
It buttressed Bitcoin’s exceptionalities in a recent Coin Report publication, shared in a Friday tweet. The $6 trillion asset manager discussed the facts, strengths, and weaknesses of the pioneering cryptocurrency, including its potential use case.
Bitcoin As a Store of Value
Fidelity branded Bitcoin as a potential store of value, a term used to classify assets that retain their purchasing power over time. Interestingly, this distinct quality is rare not just in the digital asset industry but in the global financial market, placing Bitcoin on an exclusive list.
Bitcoin has continued to grow over the years, outperforming even the best asset classes globally. Notably, BTC has outpaced even gold, an asset considered the best store of value over the past five years. The leading cryptocurrency has increased by 951% within this timeframe compared to gold’s moderate 57% uptick.
Meanwhile, Fidelity buttressed that Bitcoin’s potential as a store of value places it on a superior caliber than other cryptocurrencies. While others, like its closest competitor, Ethereum, have put in strong performances, none has done so on the same level and with the same conviction as the native token of the first fully decentralized electronic payment system.
There Is Only One Bitcoin
Furthermore, the asset manager highlighted Bitcoin’s unique strengths of scarcity, decentralization, and security. For instance, there will only be 21 million of the asset that will ever exist, a demonstration of its finite nature.
This limited cap, in addition to Bitcoin’s well-structured issuance rate, drives its value, establishing its role as an emerging store of value and aspiring monetary good. Meanwhile, with demand reaching insane levels, watchers have asserted that we will soon be out of Bitcoin to buy.
Bitcoin is also decentralized, spurred by its proof-of-work consensus mechanism. With no singular or central control, the network achieves consensus through a voting process, thereby eliminating the need for intermediaries.
Meanwhile, Bitcoin is becoming increasingly difficult to attack or compromise. The growing number of nodes, miners, and the asset’s price have made it practically and cost-wise impossible for a single individual to control up to 51% of computing power.
Bitcoin Hashrate and Price Rally Establish Security
Remarkably, this places Bitcoin on track to solve the blockchain trilemma, with its scalability drawdown being the only missing piece.
For one, the Bitcoin network ranks as one of the slowest in the sector, with its decentralized nature playing a significant role in this regard. It can process just three to seven transactions per second compared to new chains like Solana, which has a TPS of 4,000.
Essentially, Fidelity holds Bitcoin in high regard, projecting that its value will continue to rise in line with its growing utility and scarcity. While it did not predict the asset’s price trajectory, there are predictions that it would rally to $200,000 this year and $1.5 million in the next five years.
