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Bitcoin Is A Unique Cryptocurrency And Deserves Its Own Value Category – Here’s Why

The cryptocurrency industry is now worth around $1.6 trillion, of which Bitcoin is around $700 billion. Matthew Sigel, head of asset research at VanEck, says Bitcoin deserves its own category as a store of value.

“Bitcoin’s proof-of-work consensus model is truly unique among cryptocurrencies. It offers the most robust security,” says Sigel. “Its code simplicity, energy intensity, and fixed supply make bitcoin the only fungible asset that doesn’t meet higher demand with higher supply.”

Watch the video above to learn more.

Sigel took part in TheStreet’s FREE webinar: Beyond Bitcoin and the Metaverse: Crypto Categories Investors Need to Know, presented by VanEck. The conversation helps investors navigate crypto categorization schemes that include: store of value, metaverse, DeFi, infrastructure applications, smart contracts, and more.

Watch a preview: Crypto categorization: Bitcoin, NFT, metaverse, etc.

WATCH BELOW: Beyond Bitcoin and the Metaverse: Crypto Categories Investors Need to Know – FREE Webinar

Editor’s Note: The webinar was recorded on January 28, 2021.

Video transcript:

Bob Lang: Let’s talk about the store of value, Matthew. What is it and what comes out of it?

Matthew Sigel: The store of value category includes bitcoin and bitcoin derivatives. We therefore believe that Bitcoin’s proof-of-work consensus model is unique among cryptocurrencies. It offers the strongest security and ensures that every bitcoin created contains the same amount of thermodynamic energy. And this is a point of attraction for investors who compare Bitcoin to a durable asset, like gold, which also requires a lot of physical investment to operate.

Bitcoin’s high power consumption is more of a feature than a bug. But it deserves its own category as a store of value, thanks to the simplicity of its code, its energy intensity and, above all, its fixed supply, making Bitcoin the only fungible asset in the world that does not meet needs. higher. demand with higher supply. This cannot happen with Bitcoin.

Bob Lang: Investors often equate Bitcoin with the whole crypto sphere, but there is so much more. How should investors think about Bitcoin compared to other altcoins?

Matthew Sigel: The cryptocurrency industry is now worth around $1.6 trillion. Of this, Bitcoin is around $700 billion. We (VanEck) think investors are starting to differentiate between different categories of crypto. Bitcoin is a store of value in its own right, thanks to its unique proof-of-work consensus. We believe it deserves a weighting in a portfolio that is commensurate with everyone’s view of the store of value.

So maybe for gold and bitcoin it can be 0-5% of an investor’s portfolio. Much of the X Bitcoin cryptocurrency universe is more closely tied to the growth equity component of your investment portfolio. These are bets on software protocols that are gaining market share thanks to their innovative ability to send value across the world more smoothly. Perhaps this allocation in an investor’s portfolio, the X Bitcoin smart contract allocation, could also be a 0-5% allocation. And perhaps it could be compared to his investment in FAANG stocks, which make up 20% of the S&P 500, but whose earnings may be at risk if cryptocurrencies do indeed pose a competitive threat thanks to the lower cost and exchange rates. take lower than they charge. So that’s how we think about it here.

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Editor’s Note: Zach Faulds of TheStreet produced this video.