Standard Digital Assets: Bitcoin
Bitcoin is a Standard Asset
As not only the first cryptocurrency in existence but undoubtedly the store of value in the sector that all other projects look to unseat. Since its launch on January 3rd, 2009, this “digital gold” narrative that has been painted over the years has come to fruition as it has out competed actual gold in price action since its inception as shown below.
When talking about why we see Bitcoin as a Standard Asset, we have to go back to the simple questions that unravel the best from the pretenders.
First and foremost, has Bitcoin shown staying power by being resilient in bull and bear cycles?
Bitcoin actually is the only digital asset that has stayed in the top 5 during every bull cycle thus far. While the names behind it in market cap have changed over the years, the king of digital assets has stood the test of time as this third macro cycle is still underway. Who remembers the likes of Feathercoin? Maybe Peercoin? Not even Namecoin?
The staying power of Bitcoin is clear. Not only has it been a top coin over the years while countless others have failed, it has also been the number one digital asset the entire time. Maybe in the future another innovator like Ethereum can unseat the king but despite all the innovations of DeFi that ETH has brought to the table, Bitcoin has stayed golden.
Is Bitcoin the top asset in its given vertical by utility and market cap?
This is also undoubtedly true about BTC. As a store of value and peer to peer payment network that is trustless and “decentralized”, there are few competitors targeting only this use case (e.g., Litecoin, Digibyte, and Dash). What is comical is that the market cap of those and other competitors combined would still not touch Bitcoin. Holding the top marketcap of all cryptos, Bitcoin would be number one in every other vertical it tried to compete.
As you can see, Bitcoin dominance has depleted over time and while that may appear to be bearish for Bitcoin as a store of value, it is actually bullish for the entire sector. Other projects and entire verticals are finding their own legs in this space and are sucking liquidity from Bitcoin slowly over time. If crypto as a whole is to last as long as Bitcoin has and longer, this was what was needed to happen.
Has Bitcoin shown consistent adoption over time?
Adoption for Bitcoin has been roughly parabolic over the last 10 years despite the multiple bear markets that have ensued between the runs. Since it is a relatively new asset compared to Gold, Stocks, and Real Estate, the parabola will continue until sufficient market saturation is reached. It is already apparent that returns during each bull cycle have decreased over time as the market cap of Bitcoin reaches the trillions for years to come. BTC alone has already directly competed with the most respected legacy markets to date and continues to grow as larger institutions and even sovereign countries add the asset to their treasuries.
So Bitcoin as a Standard Asset…
Given the information presented thus far, it is clear that Bitcoin has the most staying power in the crypto industry, highest level of adoption, and out performed legacy assets as the best performing asset of the past decade. An asset such as this in the Standard Treasury prepares us to continue growth far past this coming bear cycle pursuing our long term vision.