Andrew Webley@asjwebley𝕏I am certainly not alone in that belief. Over recent years, we have seen a significant change in how some of the world's largest financial institutions approach Bitcoin. Companies such as Fidelity, JPMorgan, BlackRock and TD are increasingly engaging with Bitcoin, whether through research, investment products or the development of financial services. All four of these established global names released updates relating to Bitcoin this week. TD, through its TD Cowen research division, has been doing some excellent work in this space, producing detailed research into Bitcoin treasury companies and the emerging Digital Credit market. TD Cowen has also been providing research coverage of Smarter Web for some time, and I think the depth of analysis being undertaken by institutions of this calibre is particularly encouraging. These are organisations with enormous influence across global capital markets, and I think their growing involvement is another indication of how far Bitcoin has developed.
Before turning to some of the highlights from this week, I wanted to spend a little time explaining how I see the Bitcoin financial ecosystem developing and why I believe it is so relevant to the future of Smarter Web. You may have heard the phrases Digital Capital, Digital Equity, Digital Credit and Digital Money, concepts that Michael Saylor, Executive Chairman of Strategy, has spent considerable time explaining. I think they provide an excellent framework for understanding how an entirely new financial system could develop around Bitcoin, with different layers designed to serve different purposes and different types of investors.
The starting point is Bitcoin itself. I believe Bitcoin is the best form of capital ever created. It is Digital Capital. Bitcoin has a number of properties that make it fundamentally different from traditional forms of capital. Its supply is limited to 21 million coins, its issuance is programmed to reduce approximately every four years, and it operates on a decentralised global network that is not controlled by any single government, company or individual. It can be transferred around the world, divided into extremely small units and independently verified. I believe these characteristics, combined with increasing adoption and absolute scarcity, give Bitcoin the potential to become an increasingly important store of value and foundation for the global financial system.
The next layer is Digital Equity. Companies such as Strategy and Smarter Web have chosen to build substantial Bitcoin treasuries. In our case, this is SWC, our Ordinary Shares. Digital Equity is different from simply owning Bitcoin because a company can use capital markets, financing and disciplined capital allocation to increase the Bitcoin value attributable to each share over time, whilst as growing an operating business. If management executes well, this creates the potential for Digital Equity to outperform Bitcoin itself. It also introduces additional risks, including amplification, where movements in the Bitcoin price can have a greater percentage impact on the underlying value attributable to Ordinary Shareholders. This works in both directions, and Digital Equity is not a proxy for Bitcoin and can be considerably more volatile than Bitcoin.
This brings us to Digital Credit, something that has become particularly relevant to Smarter Web following the recent launch of MORE Preferred Shares on the Main Market of the London Stock Exchange. Digital Credit is designed for a different type of investor, one who may be more interested in regular income and lower price volatility than the potential capital appreciation associated with Digit