Bitcoin’s Appeal as a Store of Value and Hedge
According to Circle CEO Jeremy Allaire, Bitcoin’s appeal among investors is increasing as it serves both as a store of value and a hedge against uncertain times.
Allaire highlighted three catalysts behind the recent crypto rally, which he believes are independent of macroeconomic factors.
Building During the Bear Market
Allaire pointed out that the rebound in the crypto market was already taking place during the bear market last year. Despite high-profile exchange bankruptcies tarnishing the industry’s reputation, significant investments were being made in the infrastructure side of crypto.
He drew parallels between this temporary crash and the dot-com bubble in 2002 when internet companies fell out of favor but were being prepared for full adoption with broadband and mobile devices.
An example of this is seen with the Solana blockchain, which Circle favors for fast and cheap USDC payments. The network’s native asset, SOL, has experienced a 10% increase in the past week.
New Crypto Investment Products
The construction of new crypto investment products by major financial players like BlackRock and Fidelity is also contributing to the crypto rally. These asset managers are racing to launch the first Bitcoin spot ETF in the United States, which analysts believe may be approved by early January.
This ETF is expected to attract significant institutional capital into BTC. Allaire also noted that institutional involvement has helped establish regulatory clarity around crypto globally, although the United States lags behind in this aspect.
Bitcoin: A Hedge, Not a Currency
Allaire acknowledged Bitcoin as the largest “digital commodity” that is here to stay alongside physical assets like gold and silver. However, he does not consider BTC to be a currency and believes that digital dollars will continue to lead in that regard.
He emphasized the importance of having exposure to Bitcoin as an asset in a complex geopolitical environment, as advocated by sovereigns, Ray Dalio, Larry Fink, and others.
Hot Take: Bitcoin’s Growing Appeal
Bitcoin’s appeal is on the rise as it serves as a store of value and a hedge against uncertain times. Despite the bear market last year, investments in crypto infrastructure continued to grow. The construction of new crypto investment products by major financial players is also contributing to the rally. Bitcoin is viewed as a digital commodity rather than a currency, with digital dollars leading the way in that aspect. In a complex geopolitical environment, having exposure to Bitcoin is considered essential by industry experts. All these factors have contributed to the growing appeal of Bitcoin among investors.
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