According to Fidelity, Bitcoin (BTC) should qualify as a monetary good, not a technology.
Fidelity’s report touches on important points about Bitcoin. The report begins with a fairly simple and non-technical overview of how the Bitcoin network works. The report talks about Bitcoin’s scarcity, how Bitcoin’s “monetary network effects” are invincible. Any monetary product that comes after, the report claims, would be “reinventing the wheel.”
Why does Fidelity see Bitcoin as a monetary good? The four reasons for this are listed in the report as follows:
- A monetary good is something to which a value is attributed above and beyond its utility or consumption value. While Bitcoin’s payment network certainly has utility value, people also attribute a monetary premium value to Bitcoins.
- One of the main reasons investors attribute value to Bitcoin is its scarcity. Its constant supply is why it has the ability to be a store of value.
- Bitcoin’s scarcity is backed by its decentralization and censorship-resistant features.
- These features are hard-coded into Bitcoin and will never be changed because those who value and own Bitcoin have no incentive to do so. On the contrary, network participants are encouraged to defend these features of Bitcoin.
The following statements are also included in the report:
“Bitcoin’s first technological breakthrough was not as a superior payment technology, but as a superior form of money. As a monetary good, Bitcoin is unique. Therefore, we believe that investors should first consider Bitcoin in order to understand digital assets. At the same time, we believe that Bitcoin should be considered separately from all other digital assets that come before and after it.”
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