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Bitcoin Investment

Researcher: Bitcoin’s Value Proposition Still ‘Massively Underpriced’

Wilma Woo

Wilma Woo | Jul 27, 2018 | 18:00

Bitcoin Investment

Researcher: Bitcoin’s Value Proposition Still ‘Massively Underpriced’

Wilma Woo

Wilma Woo | Jul 27, 2018 | 18:00


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Bitcoin may still be significantly undervalued due to mainstream investors missing its “value proposition,” a Swiss researcher has concluded.


‘Only Viable Candidate For Non-Sovereign Store Of Value’

Thomas Huber — a member of the Chair of Entrepreneurial Risks at the Department of Management, Technology and Economics at ETH Zurich university — made the claims as part of ongoing research into cryptocurrency markets this week.

Uploading multiple findings to Twitter on Wednesday, Huber championed Bitcoin over altcoins as having essential benefits absent elsewhere. He wrote:

Bitcoin is currently the only viable candidate for a non-sovereign store of value, but it seems that it’s still massively underpriced. This under-appreciation of bitcoin might be the result of how investors evaluate cryptocurrencies.

The ‘Reinvention Of Money’ Is Under Investors’ Noses

Bitcoin is undergoing a shift in opinion this month after prices rose almost $2000 in a matter of days — prompting speculation that a new bull market would take over, going forward.

Regulators declined to allow a Bitcoin exchange-traded fund (ETF) by Cameron and Tyler Winklevoss a second time Thursday, however, while other candidates’ offerings remain undecided.

For Huber, traditional investors have “missed” some of the principle advantages Bitcoin offers — namely, a “secure, decentralized, and censorship-resistant” payment protocol which constitutes the “reinvention of money.” He summarized:

Given their access to tech startups and the USD, many tech and Wall Street investors merely perceive bitcoin as an asymmetric bet or call option. This resulted in the under-valuation of bitcoin’s store of value proposition and it’s hard-coded/immutable monetary policy.

Such perceptions thus led to overenthusiastic investment in alternative cryptocurrencies such as Ethereum, which Huber says will likely not see a key money influx in the future. He continued:

Given [monetary protocols’] open-source nature, value capture, however, probably won’t occur at the platform level. The value of ETH, for example, is likely priced in already. In contrast, most value will likely accrue to the winning monetary protocol because of its unique network effects.

That likely means Bitcoin.

What is a Better Investment, Bitcoin or Ethereum?

Despite common criticism that the lack of developmental progress makes alternatives such as Ethereum more attractive, Bitcoin’s unique selling point remains just that: it fulfills its remit unfailingly. Huber noted:

In the case of a monetary protocol—which needs to be secure, decentralized, and censorship-resistance — a low-innovation rate is a feature, not a bug. Monetary ‘innovation’ has—as interventionist central bank policies illustrate — mainly resulted in the debasement of money.

What do you think about Tobias Huber’s comments on Bitcoin? Let us know in the comments below! 


Images courtesy of Shutterstock, Twitter.


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