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Bitcoin’s path from “good for diversification” to “key” in an investment portfolio

Investors who are bullish on cryptocurrencies are betting more on digital assets than other asset classes like stocks. The shift towards a preference for cryptocurrency over stocks is being driven by solid investment returns. Bitcoin is making a name for itself very quickly to become one of the prominent inclusions in any portfolio.

Bitcoin’s growing role

Fidelity’s Chris Tyrer sat down with @ JackFarley96 to discuss the role of crypto in investment strategy https://t.co/ShF6wkGIU6

– Blockworks (@Blockworks_) December 10, 2021

Chris Tyrer, Head of Fidelity Digital Assets Europe, recently highlighted the increasing dominance of Bitcoin as a portfolio inclusion in an interview. He believes that crypto-native assets like Bitcoin will play a very important role in investment portfolios in the future.

The asset class in question has some complications – it has different characteristics than traditional securities. For example “various security profiles, wallets and private keys and QR codes and so on”. Nonetheless, BTC enjoys significant demand and is still on the rise despite such complications. Meanwhile, platforms like Fidelity are making it available for a user to use the flagship token HODL.

Regarding the increase in demand for BTC on Fidelity, said person said:

“… In the last 12 to 15 months the interest and attitude of this investor segment has changed fundamentally. Every investment professional in the world tries to understand the key issues. “

Even so, some of the flagship’s customers are still reluctant to commit to the vision of cryptocurrencies. Even so, these hiccups could go away over time. He claimed:

“Cryptos like Bitcoin are still very divisive. Some people are absolutely “evangelical,” and many people don’t see it as a technology of transformation. But it is our job to fill this gap. “

issue

Bitcoin concerns were also discussed in the conversation. The most important are its volatility, doubts about its fit in a portfolio and the classification of assets. Finally, people have pointed out the growing ESG concerns mainly caused by the mining operations.

While these issues may be redundant, here is the latest thread under that cover. Muneeb Ali, a bitcoin veteran, tweeted this – something to watch out for.

Since the invention of Bitcoin, Bitcoin maximalists have continued to pose one of the greatest risks to asset growth. Here’s why:

2 / Bitcoin maximalism assumes a zero-sum world. However, we are in an expanding crypto economy.

Attacks on developers and new use cases do not help Bitcoin. It just encourages these developers and use cases to move on to other ecosystems like Ethereum and Solana.

– muneeb.btc (@muneeb) December 6, 2021

The crypto market is growing at an impressive rate – there’s no denying that. Keep this in mind: BTC maximalists have been calling Ethereum a “scam” for years. But, is this really the truth? Ethereum continues to thrive as more and more developers take the network on board to develop their L2 applications.

4 / We need a strategy to attract more developers and promote new functional layers, e.g. for smart contracts or scalability. Instead, the maximalist circles make fun of every new use case in the crypto industry.

Betting against developers is not what bitcoiners used to do.

– muneeb.btc (@muneeb) December 6, 2021

There are many shortcomings in Ethereum. However, Bitcoin currently has few alternatives to offer. There are no large decentralized exchanges, liquidity protocols, and stablecoins in the Bitcoin ecosystem.

One of the reasons developers switched from the BTC ecosystem to other ecosystems like ETH and SOL. Maximalists should wake up and face reality instead. The veteran said: “Laughing at any experiment will only cause Bitcoin’s dominance to decline.”

According to him, it is time to develop bitcoin apps to turn BTC into a productive asset. We should welcome developers and entrepreneurs. The maximalist strategy served its purpose in 2017 and no longer works; Let’s concentrate on the builders now. “

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