May 18, 2024

Is Bitcoin turning into a premium asset?

March 13, 2024
3Min Reads
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Discussions during the Web Summit Qatar 2024 highlighted Bitcoin's path to becoming a first-class asset as it hit an all-time high.

For a considerable amount of time, traditional investors have dismissed Bitcoin (BTC) as a top-tier asset due to its volatility. First-class assets are generally seen by investors as reliable, low-risk, and providing steady returns. Stable nation government bonds, blue-chip firm stocks, and highly rated corporate bonds are a few examples.

Nevertheless, a recent investigation revealed that, in just four years from its launch in 2009, Bitcoin has experienced annual price drops despite its intrinsic volatility. This indicates that, despite annual inflation, the purchasing power of major fiat currencies like the USD has been surpassed by cryptocurrencies.


Silvina Moschini, the founder of Unicoin, and managing director of Bitget, Gracy Chen, gave insightful talks at the most recent Web Summit Qatar.


One cannot minimize the resiliency of Bitcoin.

Chen outlined two crucial occasions that aided in the rise of Bitcoin. First, in January, the SEC authorized a spot Bitcoin ETF, marking a significant turning point and allowing institutional capital to enter the cryptocurrency space.

The approvals encouraged traditional financial players to allocate a portion of their holdings to cryptocurrency and democratized access for individual investors. Furthermore, macroeconomic drivers that continue to propel the top cryptocurrencies and other risk assets include expected interest rate reduction by the US Federal Reserve.


Moschini highlighted Bitcoin's unquestionable popularity, emphasizing its attraction to a wide range of consumers, particularly women in areas like Mexico, where they make up the majority of cryptocurrency investors. Investor trust is being strengthened by this transition to digital assets as well as the resilience and return profile of Bitcoin.

In developing nations where fiat currencies have experienced significant inflation in recent times, Bitcoin has demonstrated consistent yearly growth, appealing to investors with a long-term investment horizon. This was demonstrated most recently when the coin reached its peak over three weeks ahead of time on the international market in nations like Argentina and Turkey.
 

The important role that institutional investors play, driven by product innovations like exchange-traded funds (ETFs) and regulatory advances, was agreed upon by both speakers. Chen claims that by complementing the increasing interest from retail segments, this institutional foray will increase the pool of potential investors for Bitcoin.


In the crypto world, diversification is still essential.

Enthusiasm is tempered with caution. Chen and Moschini highlight the volatility of the cryptocurrency markets while arguing for diversification and wise investing. Moschini's business, Unicoin, has a controlled strategy and uses actual assets to support its value in order to reduce risk. This shows how sophisticated cryptocurrency investment vehicles are becoming.
 

The two also spoke on how the dynamics of the cryptocurrency space are changing globally, with an emphasis on Asia as a developing center for blockchain innovation. The focus is shifting from conventional Western markets to places like Singapore, Hong Kong, and Dubai, where there is clear regulation and a favorable investment climate.

Both leaders believe that the rise of regulated digital currencies and the tokenization of real-world assets are positive trends. The changes point to a market that is maturing and striking a balance between investor protection and innovation.


In conclusion, discussions at Web Summit Qatar 2024 highlight Bitcoin's potential trajectory towards becoming a first-class asset, supported by its recent accomplishments. The emergence of several investment products and regulatory frameworks within the ecosystem of cryptocurrencies marks a new phase in the industry and solidifies the cryptocurrency's position in the investment landscape.


 

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