According to ARK Invest, one of the leading investors in Tesla, Bitcoin could become the first truly global form of digital money in the future.
“some influential financial research institutions are dismissing bitcoin based on stale information, incoherent arguments, and flawed analysis”.
With this analysis, ARK responds to Goldman Sachs which, a few months ago, advised its customers not to invest in cryptocurrencies.
The first point analysed by Elmandjra is volatility. In this regard, he argues that volatility is likely to decrease in the future and that it actually highlights the credibility of the monetary policy.
Bitcoin proposes itself as an alternative to the monetary policies of central banks, precisely by not giving priority to the stability of the exchange rate, but by adopting a price that is only a function of the relationship between supply and demand.
The second point is the hypothesis that it is a bubble, due to the lack of intrinsic value.
Elmandjra points out that bitcoin does not behave like a traditional asset, because it is not productive and its appreciation is based on the effectiveness with which it maintains or improves its value over time. He also points out that its total value is less than 2% of that of gold, so currently it would not be a bubble.
He considers it in some way as a circulating value, i.e. a monetary asset that is appreciated if more people ask for it, since “money is a shared illusion” and “money is valuable because others believe it is valuable“.
Elmandjra, however, also adds that not only does bitcoin share many of the characteristics with gold, but it also has better ones. In fact, it is not only scarce and durable but also divisible, verifiable, portable and transferable.
In this regard he adds:
“a range of monetary characteristics that confer superior utility, potentially driving demand and deeming it suitable, if not superior, for the role of global digital money”.
The analysis continues highlighting how the potential forks will not reduce its value, and how it is not a currency for criminals, but a censorship-resistant currency.
Finally, with regard to energy consumption, the analysis states that Bitcoin is actually much more efficient than traditional banking and gold mining on a global scale.
Elmandjra demonstrates an in-depth knowledge about this new asset and indeed speaks on behalf of ARK Invest.
It is worth pointing out that ARK focuses exclusively on investments aimed at revolutionary or disruptive innovations, and cryptocurrency is part of its investment strategy, alongside sectors such as fintech, robotics, space, mobility, next-generation Internet, etc.