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Bitcoin ‘should be entry point for digital investment’, says Fidelity

By Daniela Ešnerová

06:25, 2 February 2022

A human hand holding a golden coin with a bitcoin (BTC) logo.
Researchers at Fidelity Digital Assets have hailed the oldest cryptocurrency as ‘superior form of money’ – Photo: Shutterstock

After a difficult January, bitcoin (BTC) has kicked off February trading within the $38,000–$39,000 range. The coin is now trading some 17% below its January open of $46,312, but some 16% above the six-month low of $33,184 from 24 January.

Bitcoin is now 44% lower than from its all-time high recorded in January, but institutional investors are not giving up on the world’s oldest cryptocurrency just yet.

For example, the asset-management arm of Boston, US-based financial giant Fidelity Investments is the fourth-biggest asset manager in the world, with an estimated $3.319trn (£2.45trn, €2.937trn) assets under management (AUM) and over 27 million customers worldwide. Its Fidelity Digital Assets segment provides enterprise-grade custody and execution services for institutional investors.

As such, its researchers have made quite a pro-bitcoin statement. In a report entitled Bitcoin First, Fidelity Digital Assets director of research, Chris Kuiper, and research analyst Jack Neureuter, argue that bitcoin should still be regarded as “an entry point for investors” and that it constitutes “a superior form of money”. 

SOL/USD

177.77 Price
+2.280% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

XRP/USD

0.62 Price
+3.900% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

DOGE/USD

0.13 Price
-1.100% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

ETH/USD

3,329.22 Price
-4.090% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00
“Bitcoin should be considered an entry point for traditional allocators looking to gain exposure to digital assets.”

They also stated that “Bitcoin is best understood as a monetary good, and one of the primary investment theses for bitcoin is as the store of value asset in an increasingly digital world.”

According to CoinMarketCap.com, there are currently over 17,000 cryptocurrencies/tokens/coins, all of which constitute types of digital assets.  

Yet among these, the Fidelity Digital Assets report authors Kuiper and Neureter asserted that: “No other digital asset is likely to improve upon bitcoin as a monetary good because bitcoin is the most (relative to other digital assets) secure, decentralised, sound digital money, and any ‘improvement’ will necessarily face trade-offs.” 

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“Bitcoin clearly possesses a lot of good qualities of money, combining the scarcity and durability of gold with the ease of use, storage and transportability of fiat (even improving on it).”

Other crypto news:

  • Music and arts festival Coachella will auction 10 lifetime passes as non-fungible tokens (NFTs) in the form of a digital “Coachella Key”.

    The sale will kick off on Friday 4 January on the FXT US exchange, which Coachella says it has partnered with to “build an environmentally friendly marketplace” via Solana. A portion of the proceeds from each item will be donated to Give Directly, Lideres Campesinas and the Find Food Bank, with royalties to support the artists and further NFTs planned.

    As Coachella’s general-admission tickets start at $449 (now $549 as the other passes have sold out), the lifetime tickets are expected to be actioned for hefty prices.

Quote of the day:

Michael Saylor is co-founder, chairman and CEO of MicroStrategy, the biggest corporate owner of bitcoin. As a renowned crypto believer, when Saylor was asked whether his company was selling BTC during a recent market plunge, he told Bloomberg: “Never. No. We’re not sellers. We’re only acquiring and holding bitcoin, right? That’s our strategy.”

Top coins by market capitalisation

As of 9.00 GMT: 

Winners and losers

  • Bitfinex’s LEO token surged by 10.05% over the past 24 hours to an all-time high of $4.54.
  • Cosmos (ATOM) was the biggest weekly loser among the top 50 virtual tokens, losing 19.37% in the period.

Markets in this article

BNB/USD
Binance Coin / USD
580.36 USD
-3.31 -0.570%
BNB/USD
Binance Coin / USD
580.36 USD
-3.31 -0.570%
BTC/USD
Bitcoin / USD
65451.30 USD
-76.75 -0.120%
ETH/USD
Ethereum / USD
3329.22 USD
-142.61 -4.090%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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