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- Bitcoin offers a better alternative for investors who wish not to be at the whim of dollar debasement
- Its decentralized aspect and scarce supply render it a solid contender to other store-of-value assets
- It threatens the central authorities’ monopolistic control over the monetary system
DBS Bank Ltd., Asia’s leading wealth manager and the largest Singapore-based bank, views Bitcoin as a far more effective store-of-value asset than the U.S. dollar.
Published earlier this week, DBS’ report titled “Demystifying the enigmatic cryptocurrency,” a note to investors by Chartered Financial Analyst (CFA) and Chief Investment Officer (CIO) Consumer Banking & Wealth Management at DBS, Hou Wey Fook, asserts the same.
Bitcoin: A Better Alternative
DBS’ new investment publication, “CIO vantage point,” reasons that with global central banks injecting increasing supplies of fiat, Bitcoin offers a better alternative for investors who prefer not to be “at the whim of dollar debasement,” reported The Daily Hodl.
Bitcoin’s (BTC) exponential price rise is rivaled only by the “meteoric” balance sheets expansion by prominent central banks worldwide, including “the U.S.
Federal Reserve,” “the European Central Bank (ECB),” “the Bank of Japan (BOJ),” and “the People’s Bank of China (PBOC),” per Hou.
Decentralized & Scarce
DBS notes BTC’s decentralized aspect combined with a limited supply renders it a strong contender among other store-of-value assets. The crypto commodity’s scarce supply and easy transferability are unmatched; “Even the best quality diamonds would not hold a candle to Bitcoin’s portability value.”
Additionally, it has a low correlation to other assets, so it could also help investors diversify their portfolios.
Shortcomings & Potential Risks
However, DBS isn’t outright ignoring all of Bitcoin’s shortcomings. The bank acknowledges that the crypto coin’s reliance on its proof-of-work (PoW) consensus mechanism drives some serious scaling issues. Moreover, the network’s excessive energy consumption in mining and transaction confirmation, raising environmental concerns, can’t be taken lightly either. Bitcoin is a volatile asset that may face regulatory risks in the future, warns DBS.
Fight For Control
Bitcoin threatens the national government’s “monopolistic control” over the monetary system, the very root cause of its supremacy. So even if Bitcoin proves itself a reliable asset outside the scope of government control. Let’s be sure to count on the central authorities to try and fight Bitcoin’s reign.
Regardless of what the future might hold, Bitcoin is “an opportunity (fiat) money cannot buy.”
The torchbearer for a not-so-distant “monetary revolution,” concluded DBS.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
