Investing.com -- As Bitcoin crosses the $100,000 threshold, DA Davidson has republished its comprehensive bull case for the cryptocurrency.
In a note Thursday, the firm underscores Bitcoin's unique value proposition, resilience, and growing adoption as reasons for its extraordinary potential.
Bitcoin is an asset unlike any other
"Bitcoin is an asset unlike any other," states DA Davidson. Since its inception in 2009, Bitcoin has processed trillions of dollars in transactions while remaining operationally flawless.
The firm notes it has survived intense competition, including challenges from major corporate entities, and consistently retained its position as the most valuable cryptocurrency.
'All of money' potential
DA Davidson believes that central to Bitcoin's value is its potential to become "All of Money."
DA Davidson highlights its ability to act as a global store of value, medium of exchange, and unit of account. While the likelihood of Bitcoin replacing government currencies is estimated at 1-2%, this slim probability, combined with its other use cases, supports its current valuation.
DA Davidson says that if Bitcoin were to achieve this outcome, its value could reach $5 million per bitcoin, reflecting the scale of the global money supply.
A store of value
Today, DA Davidson says Bitcoin primarily functions as a store of value, providing a hedge against economic instability.
While Bitcoin has shown occasional correlation with risk assets, DA Davidson argues that its fundamentals are driven by adoption rather than traditional economic metrics, making it a low-correlation asset over the long term.
The firm adds that trading is Bitcoin's second major application, thanks to its deep liquidity, global reach, and 24/7 trading. The cryptocurrency also retains potential as a payment network, with applications in cross-border transfers and corporate treasury management.
"Digging deeper, we would also point out that Bitcoin represents an ideological, political and cultural phenomenon, which is important because those drive adoption alongside the more economic drivers discussed above," says the firm's analysts. "It’s important to remember that these cultural movements look differently across the globe and often find a stronger foothold in truly oppressive or distressed economies."
However, DA Davidson cautions about high risks, including regulatory challenges and security threats. Despite this, they maintain a bullish stance, emphasizing Bitcoin's revolutionary potential to reshape finance and technology.