ARK Invest, an established institutional investor in Bitcoin (BTC), the flagship cryptocurrency, states that it believes the digital asset is “creating the possibility of a global monetary system controlled not by nation-states but by individuals.”
ARK Invest notes in a comprehensive report that by “eliminating the need for a trust-based model,” Bitcoin is arguably beginning to call into question the existing foundation of more traditional economic organizations. The pseudonymous digital currency also appears to be playing a key role in establishing a more stable and “predictable” financial system, the ARK Invest team notes.
They add that Bitcoin has provided investors with a “unique” opportunity. Although not all investors are convinced that it’s now a legitimate asset, the ARK Invest team thinks that it’s “the most compelling monetary asset to emerge since gold.”
According to ARK Invest’s findings:
“The financial system’s weakness today is a function of a trust-based model controlled by centralized institutions. Human bias and error exposes participants to mismanagement, creating an unpredictable environment for economic activity.”
But now that we’ve entered the Information Age, the institutional investor claims that there’s a “new economic order” being established by combining certain aspects of cryptography and other fundamental concepts from computer science.
The ARK Invest team claims that Bitcoin “fundamentally” changes or shifts how a financial system “distributes trust.” It effectively eliminates the need or the roles of traditional service providers or institutions that depend on centralized authorities. According to ARK Invest, Bitcoin helps with establishing an ecosystem based on solid foundations like fundamental principles from computer science.
The report also mentioned:
“In contrast to a central bank that controls monetary policy, or a commercial bank that controls the custody of assets, or a payment processor that controls consumer transactions, the Bitcoin network and all of its participants oversee all such functions.”
Traditional institutions are tasked with coordinating the activities or functions of the legacy financial system, meanwhile, Bitcoin “operates as a single institution.”
As explained by ARK Invest:
“Instead of relying on accountants, regulators, and the government, Bitcoin relies on a global network of peers to enforce rules, shifting enforcement from manual, local, and inconsistent to automated, global, and predictable.”
Last month, a report revealed that Bitcoin (BTC) was “disproportionately” favored by North American investors as the preferred digital asset investment.
However, cryptocurrency markets are plagued with manipulation and “endless” wash trading according to a report released in August 2020. Bitcoin and other crypto-assets are also extremely volatile and can potentially result in huge losses for investors.
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