Crypto assets should be used in the same way as gold, to preserve wealth outside of the Fiat system, according to Mark Yusko, CEO of Morgan Creek Capital Management.
Yusko runs Morgan Creek Digital, a subsidiary of Morgan Creek Capital, which allows investors to invest in the infrastructure of the crypto universe, responsible for allowing funds to be passed on outside of the banking system.
He believes cryptocurrency is the "evolution of money" as opposed to another currency.
"Everything we think of as money, such as pounds, dollars are not money, they are currencies and they are backed not by no liability but by government debt. Currencies come and go. Cryptocurrency, particularly Bitcoin, is an evolution of gold. It's a store of value," he said.
He said there was a defined number of Bitcoins in the market, which meant it was benefitting from the effect of scarcity, in particular a low stock to flow ratio, similarly to gold.
This is the reason why Bitcoin is sometimes referred to as digital gold. As such it can help fight the deflation of other common currencies, he said.
Yusko said: "[This is] why crypto is important. Everyone needs to own crypto.
"You want to own crypto for the same reason you want to own gold. You should take a portion of your assets and opt out of the Fiat system to preserve wealth.
"[Currencies are] declining in value, Bitcoin is accreting in value, one is inflationary, one is deflationary. So you want to own some Bitcoin to protect the rest of your portfolio from currency devaluation."
Considered use of crypto
There are signs the investors have started to use crypto in this way.
Research from crypto exchange platform Gemini has found one in five (18 per cent) UK adults now own cryptocurrency, and the majority (80 per cent) bought and held crypto for long-term gains.
A comparatively low 40 per cent said they were actively trading crypto to make a profit.
Blair Halliday, head of UK at Gemini, said the annual study, 2022 Global State of Crypto Report, suggested more people were recognising crypto’s part in a diversified investment portfolio.
He said: “Last year was transformational for cryptocurrency ownership, with significant growth in UK adoption.
"A high proportion of UK investors see crypto as a long-term store of value, suggesting more people are recognising crypto’s part to play in a diversified investment portfolio."
Crypto adoption has accelerated rapidly in the past twelve months, with nearly half (45 per cent) of crypto investors first buying in the past year, Gemini said.
Adoption is similar in other major European markets, in line with developed nations including Australia and the US, where 18 per cent and 20 per cent, respectively, have bought crypto.
However, Europe lags behind other more crypto curious nations such as Brazil, where 42 per cent of investors hold crypto.
Value in crypto
Morgan Creek Digital allows investors to invest in the infrastructure of the crypto universe, which is where Yusko believes the value lies.