Fidelity Discusses Future of Crypto Ecosystem — Says Bitcoin Is 'a Superior Form of Money'

Fidelity Digital Assets has released a report explaining why bitcoin is a superior form of money. The report discusses the future of the digital asset ecosystem and compares bitcoin to newer and smaller cryptocurrencies.

Fidelity Says ‘Bitcoin First’

Fidelity Digital Assets, a subsidiary of Fidelity Investments, published a report this week titled “Bitcoin First: Why investors need to consider bitcoin separately from other digital assets.”

The report addresses some concerns investors have including whether bitcoin “may be vulnerable to innovative destruction from competitors (such as the story of Myspace and Facebook)” or whether the cryptocurrency “offers the same potential reward or upside as some of the newer and smaller digital assets.”

Report authors Chris Kuiper and Jack Neureuter explained:

Traditional investors typically apply a technology investing framework to bitcoin, leading to the conclusion bitcoin as a first-mover technology will easily be supplanted by a superior one or have lower returns.

They noted, “Bitcoin is currently the most secure and decentralized network but, at the base or native network layer, it is not the most scalable.” This has led to a boom in the digital asset ecosystem, they continued.

The report proceeds to discuss two dominant narratives for envisioning the future of the digital asset ecosystem.

The first is “a multi-chain world.” The authors described: “In a world of multiple winning chains, it still appears that Bitcoin is likely the best equipped to fulfill the role of the ecosystem’s non-sovereign monetary good with relatively less competition than other digital assets attempting to fulfill alternative use cases.”

The second is “a winner-take-all or most world” narrative. The report details: “Given that Bitcoin is arguably the most decentralized and immutable blockchain in existence, it appears as a prime candidate to be one of, or perhaps even the sole winner if this situation were to play out.”