American multinational investment banking firm TD Cowen recently published a report on the properties that make Bitcoin a superior store of value.
The TD Cowen report, seen by Bitcoin Magazine, details Bitcoin's properties as a store of value. First, the firm noted that the limited issue of the cryptocurrency, of 21 million units, makes it a potentially superior store of value to fiat currencies and other forms of money, such as digital money. He even points out that cryptocurrency is potentially superior to known reserve assets, including gold and other precious metals.
According to TD Cowen analysts, Bitcoin has exceptional properties, such as durability, portability, fungibility, verifiability, divisibility, and scarcity; and noted that it is transparent and censorship-resistant.
For all these reasons, TD Cowen considers Bitcoin “a superior store of value relative to all other forms of money.”
Bitcoin is here to stay, according to TD Cowen
Despite its short history compared to other currencies and assets such as the dollar or gold, TD Cowen noted that Bitcoin has demonstrated great performance and has managed to attract the interest and gain the trust of millions of investors and people around the world. Likewise, small and large companies from different sectors and industries are becoming increasingly interested and trusting in cryptocurrency. The same as local governments and entire countries such as El Salvador, and all this is thanks to the growth history and resistance that Bitcoin has been created since its launch in 2009.
According to the firm, although Bitcoin is relatively new, “it has withstood enough market testing to suggest a high likelihood that it will not disappear as a valuable asset anytime soon,” but rather the opposite, the cryptocurrency is becoming part of the mainstream.
Investors' appetite for Bitcoin
TD Cowen also highlighted that the demand and confidence of people and investors in Bitcoin could continue to increase as long as the cryptocurrency continues to exist and take over the market.
On the other hand, the investment banking firm pointed out that the increase in demand for Bitcoin could be proportionally reflected in the price of the cryptocurrency. TD Cowen does not rule out the possibility that the price of BTC will exceed its current all-time high of $69.000, seen in November 2021, driven by the approval of a Bitcoin Spot ETF by the United States Securities and Exchange Commission (SEC).
While the US securities regulator has yet to approve any Bitcoin-based investment products in the spot market, TD Cowen analysts believe this is a question of “when” rather than “if,” with the approval of a Bitcoin spot ETF on US soil “inevitable.”
TD Cowen also discussed the continued development of the Lightning Network, the arrival of the upcoming Bitcoin halving, and potential FASB/GAAP accounting changes regarding Bitcoin holdings such as Catalysts for a possible bullish rally of BTC in the short term.
Bitcoin mining is energy efficient
Bitcoin mining was another topic TD Cowen discussed at his recent report. According to Bitcoin Magazine, the firm noted that this activity does not represent a potential risk to the environment. Thus, contrary to what some still consider, TD Cowen noted that bitcoin mining is one of the most efficient uses of energy electrical.
“Bitcoin mining is, in our view, one of the most efficient and cleanest industrial uses of electricity and is improving its energy efficiency at a faster rate than most other industries,” the firm noted.
In line with the above, we can highlight the recent announcement by the government of Kyrgyzstan, which has approved a project to invest $20 million in the creation of new facilities at the Kambar-Ata-2 hydroelectric plant, to take advantage of the energy surplus of this plant in bitcoin mining.
According to the country's national news agency, News, this will be an efficient and intelligent way to take advantage of all the surplus energy electricity that is wasted at the plant and, at the same time, generating additional resources for the country and its population.
MicroStrategy's Bitcoin Strategy
TD Cowen also highlighted the paradigm shift which is being promoted by MicroStrategy, Michael Saylor's business intelligence company, with the Bitcoin-based strategy it began implementing in August 2020.
MicroStrategy is accelerating shareholder value creation, TD Cowen said. The firm also noted that Saylor’s company is combating “the depreciation of the purchasing power of the U.S. dollar” with Bitcoin.
Michael Saylor reported three years ago that his company would start investing in bitcoins to protect the value of its assets. However, according to TD Cowen, this strategy has quickly become an opportunistic strategy aimed at accelerating the creation of value for the company's shareholders. This is why many Investors see MSTR as an attractive vehicle to gain exposure to Bitcoin, TD Cowen concluded.
MicroStrategy shares rose 2,66% this week following TD Cowen's bullish report on Bitcoin and its cryptocurrency investment and store of value strategy.
Continue reading: SEC has begun reviewing applications for Bitcoin spot ETFs in the United States
