Bitcoin’s expanding payment field could lift this ETF

[ad_1]

Bitcoin lost almost two-thirds of its value last year en route to its worst annual performance since 2018, but some crypto experts and market watchers remain optimistic about the future of digital coins in terms of lower price. payment friction.

It was one of the original use cases for bitcoin when it debuted over 13 years ago, and one that was largely lost in the reshuffle amid volatility and bitcoin being touted as an investable asset class. If market players refocus on the case of bitcoin payments, exchange-traded funds such as the VanEck Digital Transformation ETF (DAPP) could benefit.

DAPP, which tracks the MVIS Global Digital Assets Equity Index, is certainly crypto-correlated, but its 20 holdings are not necessarily bitcoin dependent. Rather, these companies are exposed to various facets of the digital asset economy, including payments.

While many have quashed bitcoin’s original vision as digital money largely because of volatility, some investors and developers are still optimistic about its potential to improve financial transactions, Tanaya Macheel reported for CNBC.

Of course bitcoin’s status as digital money would be enhanced by lower volatility, but the fact that a fair number of market watchers still see this potential after a brutal 2022, including the demise of FTX, is undoubtedly encouraging.

Blocks (NYSE:SQ) Mike Brock, who heads the company’s TBD unit, told CNBC that the company’s focus is not on the stock market, but rather on international money transfer efforts, which could be a better long-term value proposition for investors. Block is DAPP’s largest holding at the end of 2022. For this company and DAPP investors, the good news is that the prices of currencies – digital or fiat – have no bearing on a remittance business.

Bitcoin today enjoys a huge premium that comes largely from speculation, Brock told CNBC. I think the long term value of bitcoin will increase due to the growing utility on the network as it is increasingly used to power things like international remittances [and]to secure other types of transactions like digital identity work that was doing.

Another example of longer-term efforts to bolster the status of assets as an enhanced form of payment are the Lightning Network bitcoin enhancements. Additionally, bitcoin could lift some components of the DAPP, namely Block, as it is an important asset for those who are unbanked or do not have access to traditional financial services.

Bitcoin has also been a lifeline for other groups marginalized or underserved by financial institutions such as sex workers, Lebanese freelancers struggling with hyperinflation and unable to access their bank accounts, and Afghans suffering from a nationwide cash crunch, CNBC concluded.

For more news, insights and analysis, visit the Crypto Channel.

Opinions and predictions expressed herein are solely those of Tom Lydon and may not materialize. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

[ad_2]