Bitcoin Takes its Lumps, but Still Has Long-Term Allure | ETF Trends

Bitcoin’s efforts to join the safe-haven asset crowd have taken some punishment this month, but that doesn’t diminish the long-term outlook for the largest cryptocurrency or ETFs with exposure to it, such as the ARK Web x.0 ETF (NYSEArca: ARKW).

Bitcoin and other cryptocurrencies have experienced another year of wide oscillations, but major investors and financial players continue to keep their fingers on the pulse of the developing, digital currency market.

Central banks rapidly debasing fiat currencies is one potential catalyst for bitcoin and digital assets, which aren’t backed by traditional monetary authorities.

“Because of bitcoin, we are witnessing a global battle among monetary systems, both sovereign and non-sovereign,” said ARK Invest in a recent report. “As an open, neutral, and permissionless global monetary system with no reliance on the State, bitcoin is in a good position to win this battle.”

Backing Bitcoin

Bitcoin, the largest digital currency by market capitalization, has its share of critics and supporters. Integral to the case of expanded acceptance and use of the digital asset is conveying to investors that bitcoin has a store of value properties, whether it be by measuring intrinsic or monetary value.

Bitcoin’s historical volatility trends, which have ebbed somewhat, have often prevented some market observers from calling the digital asset a safe-haven on par with gold, but the coronavirus headlines could be prompting some investors to revisit that thesis. There’s no denying there are some exponential growth estimates associated with bitcoin.

“ARK believes the result will be measured in trillions, more than an order of magnitude higher than its $150 billion network value*today,” according to ARK.

Unlike fiat currencies, which can be printed by central banks at will, with only 21 million bitcoins ever allowed in existence, the supply of the cryptocurrency is limited algorithmically. After the next halving, only half as many BTC will be generated per day. (4,380 x 6.25 x 5,000 = $136,875,000 per month). Bitcoin is scheduled to undergo a halving in May.

“All units of bitcoin have been created according to a mathematically metered, predictable, and predefined schedule. The supply of bitcoin is scarce, capped at 21 million units. Approximately 18 million units have been created with the current issuance growth rate set to halve in May 2020,” according to ARK.

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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.