VanEck Asset Management Company, previously unsuccessfully trying to bring Bitcoin ETFs to the US market, published a study entitled "Justification for Bitcoin Investments," naming reasons that should encourage investors to think about adding a leading cryptocurrency to their portfolios.
According to VanEck, bitcoin is a combination of “longevity, scarcity and privacy, which contribute to its monetary value”.
Monetary value versus intrinsic value
VanEck repeatedly refers to the idea that Bitcoin is “digital gold” and can serve as a means of accumulation.
Responding to critics awaiting failureBitcoin due to the lack of its intrinsic value, the company urges to distinguish this concept from the concept of monetary value, which is possessed, for example, by gold, silver and art objects.
According to VanEck, monetary value should not be secured:
“Monetary value, in essence, isbet that the object will maintain or increase its value in the future. Instruments with monetary value serve as a means of accumulation and can be considered as means of acquiring instruments with intrinsic value in the future. Someone may not like this statement, but it has been since the inception of civilization. ”
Low correlation with traditional assets
VanEck believes that bitcoin is able to increase portfolio diversification, as it is less correlated with traditional assets such as gold, bonds and stock indices in a wider market.
As an illustration, the company cites a correlation table of bitcoin with large market indices, for example the S&P 500.
VanEck also mentions the scarcity and limited supply of bitcoin as one of the main reasons for the success of the asset.
The company draws attention to the historical relationship between halving and market price behavior and recalls that the next such event will take place in May 2020.
Increased user acceptance
Seeking to reinforce the notion that Bitcoincontinues to spread among users, VanEck indicates that the number of transactions exceeded 400,000 per day, which corresponds to a significant part of operations performed through the SWIFT system.
The firm also claims that existing crypto exchanges are firmly established in the market as an additional confirmation of its point of view.</p>