Michael Dunworth, the CEO of Wyre, a fintech startup which focuses on processing global bank transfers, recently stated that financial advisors must consider Bitcoin as an asset class.
As described by Bitcoin developer Andrew DeSantis,
“Bitcoin is a decentralized timestamp and messaging protocol that when implemented and stable results in a value storage system.”
Thus, depending on the usage, Bitcoin can be used as digital gold, settlement network and digital cash or currency.
Safe haven asset
In China and other countries, institutional investors and high profile traders utilize Bitcoin as a safe haven asset and wealth management product (WMP). In terms of economic uncertainty and currency curbs, investors refer to Bitcoin to protect their wealth and assets. Such use case of Bitcoin was also emphasized by early Facebook investor and Golden State Warriors NBA team owner Chamath Palihapitiya when he stated:
“Reiterating my belief about Bitcoin. It's the ultimate insurance policy against autocracy, currency curbs and other forms of value destruction.”
Dunworth, who recently secured a $5.8 mln Series A funding round led by Amphora Capital for Wyre, expressed his optimism toward Bitcoin urging financial advisors to consider the abovementioned qualities of Bitcoin and categorize Bitcoin as an asset class.
Most importantly, Bitcoin is one of the few currencies or assets that are completely and solely dependent on the market, while most of the assets in the public market are directly affected by the performance of reserve currencies and the global economy.
Volatility
At the netwealth group study tour, a four-day fintech program attended by Australia-based financial advisers with a combined Funds Under Administration (FUA) of $14 bln, Dunworth stated:
“There's a huge amount of technological growth that is yet to happen, with a very wide impact internationally. The scope for opportunity is huge...if someone told you back in 1991 that you could invest in this thing called 'the Internet', you would do it knowing what we all know now about it. We are at that same [early] stage with Bitcoin.”
Dunworth reaffirmed that while Bitcoin’s short-term volatility rate remains high, it still makes an excellent long-term investment for a wide range of clients and investors.
“A lot of people say that Bitcoin is very volatile. It is in the short term but if I were doing fund management for my client, I see it as a very good long-term investment,” noted Dunworth.
The volatility rate of Bitcoin is a measurement of growth which doesn’t and can’t accurately depict the value of Bitcoin.
Bitcoin has a fixed cap of supply established at 21 million. As long as the demand is sustained or continues to increase, Bitcoin price will also maintain an upward trend.
Although many experts in the past did mention that the high volatility rate of Bitcoin is a negative component as a digital currency and technologically, Bitcoin is still in the early phase of development.
As time passes, the volatility rate of Bitcoin will decrease as scaling solutions are implemented and the network is optimized.