Traditional investors tend to use a technology investing framework when analyzing bitcoin, which leads them to the wrong conclusion that the cryptocurrency “as a first-mover technology, will easily be supplanted by a superior one or have lower returns,” analysts Chris Kuiper and Jack Neureuter wrote.
However, “bitcoin’s first technological breakthrough was not as a superior payment technology, but as a superior form of money,” the authors wrote.
“Bitcoin is fundamentally different from any other digital asset,” the report said, and other cryptocurrencies are unlikely to improve on BTC as a monetary good because it is the most “secure, decentralized, sound digital money.”
The success of the Bitcoin network is not mutually exclusive with the success of other networks, the report argued, as the rest of the digital asset ecosystem can service different needs or solve other problems that bitcoin can’t.
According to the report, the world’s largest cryptocurrency’s return profile is driven by two powerful tailwinds: “global growth of the broader digital asset ecosystem and the potential instability of traditional macroeconomic conditions.”
“Bitcoin should be considered first and separate from all other digital assets that have followed it,” and it should be viewed as an entry point for traditional allocators looking to gain exposure to the sector, the report added.
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