VanEck – one of the top investment management companies in the United States – just enlisted four reasons why Bitcoin should be in the portfolio of investors. A few days ago, VanEck published a report with the title “The Investment Case for Bitcoin.” The research aims at determining the role that Bitcoin (BTC) can play in an investment portfolio.
VanEck is the company that attempted to list an exchange-traded fund for Bitcoin (BTC) with the United States regulators in 2018. According to the firm, BTC’s combination of scarcity, privacy, durability, and its nature as a bearer asset all contribute to it holding monetary value.
Bitcoin (BTC) Holds Monetary Value Rather than Intrinsic Value
VanEck has always referred to Bitcoin (BTC) as digital gold. The firm argues that BTC is a potential store of value. Bitcoin (BTC) critics have been saying BTC does not have any intrinsic value, which is the reason for its failure. VanEck disagreed with that opinion, and the firm drew a clear distinction between the terms monetary value and intrinsic value. The firm said that Bitcoin (BTC) actually has monetary value just like the US dollar, gold, artwork, or silver.
In the research, the firm pointed out that monetary value is not backed by anything. VanEck said:
“Monetary value is inherently a bet that an object will retain value or increase in value in the future. Items with monetary value are items that store value and can be seen as claims on future intrinsic value. This may make people uncomfortable but it has been true since the dawn of civilization.”
Bitcoin’s Limited Supply and Halvings
The research of VanEck also stressed the limited supply or scarcity of Bitcoin (BTC) as a major reason for the success of the digital currency. The halvings of Bitcoin, which is the reduction of block reward by 50 percent – are programmed to take place every four years. VanEck pointed out that each halving event has led to the growth of Bitcoin (BTC) price. The next halving would take place in May next year, and it is likely to push the price of Bitcoin significantly higher.
The Adoption of Bitcoin (BTC) Is On the Rise
VanEck cited that the adoption of Bitcoin (BTC) is on the rise. The firm noted that BTC transactions exceed 400k permissionless transactions on a daily basis. Whereas, the on-chain transactions of Bitcoin amount to a considerable portion of SWIFT transactions. The firm also said that existing digital currency trading platforms are healthy and they are not going away anytime soon.