A new report argues that bitcoin should be considered the first in a new kind of asset class.
The paper was produced by digital currency exchange and wallet startup Coinbase and ARK Invest, an investment management firm that specializes in disruptive technologies and offers financial products tied to bitcoin.
The white paper, written using data from Coinbase, TradeBlock, the SP 500 Index and several additional industry benchmarks, outlines four approaches to characterizing assets before laying out the argument that traditional investors should view “cryptocurrency” as an entirely new asset class.
ARK Invest analyst Chris Burniske, who co-authored the report, said that the project started as an exploration between the two companies of how people use gold to buy bitcoin.
Burniske told CoinDesk:
“We realized this is a bigger story than comparing bitcoin and gold. This is about bitcoin and cryptocurrencies maturing into their own asset class.”
The new report builds on a 1997 paper about asset class characterization, which breaks down assets into three categories: capital assets, consumable/ transformable assets, and store-of-value assets.
Burniske and co-author Adam White, who serves as vice president for Coinbase, go on to define four distinct characteristics of traditional asset classes, positioning bitcoin both within and beyond those traditional definitions.
Liquidity and distinctness
The first characteristic