"I believe there is credibility and credence in what I believe is this new asset class, but at the same time there are some significant downsides," Brown said, speaking at the inaugural Investment Week Summit today (6 July).
This "new form of decentralised money" represents a removal of central intermediaries from transactions, he said, which he explained will be "undeniably disruptive".
International regulatory group unveils first set of global rules for crypto industry
Along with decentralised exchanges, there are now also decentralised custodians or decentralised loss adjusters, said Brown, which he described as "embryonic".
"In fact, almost every area of financial services does indeed have a decentralised version of itself," he said.
At its peak, bitcoin held a market cap greater than the Swiss franc or Russian rouble, and currently represents over $1trn in value.
Unlike traditional fiat currencies, bitcoin's supply side is fixed and pre-coded, Brown explained, and there will never be more than 21 million bitcoins in circulation.
In contrast, he pointed to the history of quantitative easing, which exploded during the financial crisis and has grown exponentially, notably including central bank responses to the coronavirus pandemic.
Brown also highlighted cryptocurrency's potential as a means to reduce transaction costs, nothing the average weight remittance cost globally is "just over 6%", with many nations seeing far higher rates.
Shortcomings
However, Brown warned: "The big problem with bitcoin, the big problem with all cryptocurrencies, is volatility.
"It is one of the hardest, if not the hardest, asset class to try and work out where is the value versus where is the risk," he said.
Digital asset ETF AUM surges 63% in 2023
Brown pointed to the collapse in various stablecoins, such as TerraUSD, adding that "even the safe havens in this asset class are not safe either".
Nevertheless, he argued that investors should not just look to bitcoin as a potential source of value in cryptocurrency and should instead look to other smaller coins.
He said that in the tech boom, if an investor had stopped investing in tech because they owned Microsoft, they would have missed the opportunity of the FAANGs decades later.
"What I like to look at are not just things like bitcoin, which was the precursor, but the second and third order generation technologies which come afterwards," he said.
"They are often the ones that take the true value and that is really where the opportunity might be," he added.
FCA clamps down on marketing of cryptoassets
He suggested bitcoin also falls short in some respects, noting the cryptocurrency only makes around seven transactions per second, compared to Visa's 25,000.
In response to this and other opportunities, firms such as Facebook (now Meta) have attempted to develop their own digital currencies but faced scrutiny from regulators, who argued currency creation is reserved as a right of a nation's sovereignty.
However, he noted that some, such as JP Morgan, have issued their own JPM Coin, which they use to make transactions internally.
Since its launch in 2019, the coin has been used to settle about $300bn in payments.