Entering text into the input field will update the search result below

Bitcoin For Investors In 3 Ways

WisdomTree profile picture


  • Gold has a long and remarkable history as a store of value and hard money currency for human civilizations.
  • The strong historical returns of bitcoin demonstrate exponential growth.
  • Bitcoin has historically demonstrated a very low correlation to other asset classes.

By Will Peck

Everyone has a bitcoin take these days.

It's "going to the moon."

It's "digital gold."

It's "magic internet money."

It's a "fraud."

A quick Google search will yield a lot of these results - believe us, it is very easy to go down rabbit holes on the topic.

We are not going to take you through the whole debate, but rather lay out a clear and simple framework for how you may want to think about this new asset class.

In summary, we believe bitcoin is an investible asset with a few clear investment theses.

So, what is Bitcoin/bitcoin? Bitcoin (capital B) is a ledger of transactions maintained by a peer-to-peer network. The ledger is governed by a consensus protocol, without the need for any centralized authority. And bitcoin is the currency unit of that network - the asset we're analyzing here. Without getting too technical, the method of transferring bitcoin from one person to another relies on cryptography - which is where the term "cryptocurrency" (or "crypto") derives from. However, even the foregoing description provides an unsatisfying answer for investors.

So, what is bitcoin to investors? It is a decentralized, censorship-resistant, scarce and structurally deflationary asset.

Some crypto-friendly pundits will stop there and tell you to move all your money into bitcoin. I think we all know that advice simply doesn't work for professionals. But there may be sound reasons to add bitcoin to your portfolio.

We see three fundamental investment theses for bitcoin.

1. Scarcity and out of governments' and central banks' control

We could call this the "gold" case. Gold has a long and remarkable history as a store of value and hard money currency for human civilizations. We can point to several characteristics for why this is, such as scarcity, decentralization, fungibility and divisibility. Bitcoin shares these traits. There are additional benefits

This article was written by

WisdomTree profile picture
In 2006, WisdomTree launched with a big idea and an impressive mission — to create a better way to invest. We believed investors shouldn’t have to choose between cost efficiency and performance potential, so we developed the first family of ETFs designed to deliver both. Today, WisdomTree offers a leading product range that offers access to an unparalleled selection of unique and smart exposures.

Recommended For You

Comments (1)

Never a dull moment when Wisdom Tree enters the creation of business /economic dynamics.

You have taken obscurity and made clarity a visible concept . What is it and how is it and where is it can now be recognized by your 3-Way Article.

Next will probably confuse all that you just expressed .
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.