Bitcoin is a store of value but remains volatile: Fidelity exec

The head of the digital asset division at Fidelity believes that Bitcoin is a potential store of value but is still very volatile 

Tom Jessop, head of Fidelity Digital Assets, revealed that several investors want Bitcoin to become a store of value, but the cryptocurrency remains very volatile. Jessop made this known while speaking yesterday at the Reuters Global Investment Outlook Summit 2020.

The Fidelity executive pointed out that with Bitcoin, they still use the term’ potential store of value’ as it remains a very volatile asset. Jessop added that by any standard, Bitcoin might struggle to achieve the mantle of an actual store of value due to its features.

However, there is still a chance that Bitcoin becomes a store of value as more investors are now thinking of the cryptocurrency market constructively. Jessop heads the Digital Asset division of Fidelity, which offers cryptocurrency trading and custody services for financial firms and corporations.

His statement comes at a time when Bitcoin recently touched a new all-time high. This year, Bitcoin has grown by more than 150% despite losing 50% of its value in March due to the effects of the pandemic. The massive volatility in Bitcoin’s price is the reason why most financial experts view it as an investment tool rather than a store of value like gold.

The sharp price movements in a market often scare investors as the volatility comes with a certain degree of risk. However, unlike the other major asset classes, Bitcoin’s volatility is positively correlated with the asset’s price as investors make huge profits when they hold on to the asset for a few months or years.

Despite Bitcoin’s volatility, several market experts believe that the cryptocurrency market has room for more growth. In an October report regarding bitcoin’s market cap, Fidelity Digital Assets stated that it believes bitcoin’s market cap has plenty of room to grow.

The financial institution added that the current market cap is a drop in the bucket compared with the various markets Bitcoin could disrupt. Hence, the company concluded that Bitcoin is a potentially useful investment tool for investors.

The current market bull run is expected to grow even bigger in the coming weeks and months. Several analysts predict that we are at the beginning of the bull run, suggesting that the prices could skyrocket shortly.