Fidelity Digital Assets publishes Bitcoin store-of-value investment thesis

On July 28, 2020, Fidelity Digital Assets publishes Bitcoin store-of-value investment thesis. Fidelity releases report titled 'Bitcoin Investment Thesis: Bitcoin's Role As an Alternative Investment,' adding institutional weight to the bull case.

Coming from Fidelity, one of the world's largest asset managers with over $8 trillion in assets under management, the report carried enormous weight and signaled that mainstream financial institutions were taking Bitcoin seriously as a legitimate investment rather than dismissing it as speculation or fraud. The report analyzed Bitcoin across multiple dimensions including its monetary properties, adoption trends, risk-return characteristics, and role as a portfolio diversifier.

Fidelity's research concluded that Bitcoin's fixed supply, decentralized architecture, and growing network effects made it a compelling store of value in an environment of expansive monetary policy and negative real interest rates. The analysis emphasized that Bitcoin's low correlation to traditional assets like stocks and bonds meant it could improve portfolio efficiency by providing diversification benefits even if allocated at relatively small percentages.

The report addressed common objections to Bitcoin including volatility, regulatory uncertainty, custody challenges, and energy consumption, providing institutional perspective on how to evaluate these concerns. Fidelity argued that Bitcoin's volatility was declining over time and was acceptable for a young asset class with significant upside potential, that regulatory frameworks were gradually developing and becoming more favorable, that custody solutions meeting institutional standards now existed (including Fidelity's own custody service), and that Bitcoin's energy consumption needed to be evaluated against the benefits it provided and compared fairly to traditional financial infrastructure's energy use.