Bitcoin is more than just a digital currency
Many people refer to Bitcoin as a decentralized digital currency that allows quick transactions between two people, without the need for an intermediary. However, this definition may sound a little generic and limited, because it does not understand the impact that Bitcoin can have on economic and monetary relations.
Bitcoin is much more than just a digital currency. It is a financial sovereignty platform that hosts a legitimately scarce, robust, non-confiscating and decentralized asset. When this understanding is reached, it can be seen that Bitcoin is different from any other currency (digital or physical) ever created. Its differentials are:
- Scheduled shortages
- Not confiscated
- Robust against attacks
Bitcoin's scarcity assumes that there can only be up to 21 million units. Its network is robust because it accumulates gigantic computational power, which is maintained through the miners' self-interest, always looking for a reward for keeping this structure functioning in a decentralized way and distributed around the world.
Bitcoin issue. Source: Bitcoinity
Bitcoin is incensurable because no one can change the records of all transactions ever made in the history of the network. In addition, it is incophiscible, so that no government, company or person is able to steal it on the basis of force or decree.
However, it is necessary to clarify that it is still an experiment, because it is a new class of assets. Bitcoin is less than 10 years old, which means that discoveries are still being made, whether they are market or technological. Because of this, the risks are still high in the face of such a short history.
As an asset, Bitcoin has a low correlation with different asset classes in the financial market. This low relation with assets from different markets makes it an interesting option in any investment portfolio, mainly in the function of protection against financial or political crises.
Source: Binance Resarch, Bloomberg
As much as it is just an experiment, we believe that Bitcoin should make up at least 1% of any investment portfolio. A Binance Survey, the world's largest cryptocurrency broker, highlighted an increased performance for portfolios that added Bitcoin to their wallets.
Source: Binance Research
We believe in the Bitcoin thesis as an asset for protection and reserve of value. This thesis holds when we look at the past 10 years, when the asset went from $ 0 in 2009 to more than $ 19,000 in 2017.