There is a lot of hype around high bitrate files, DSD, Native DSD versus DoP, Upsampling, Transcoding PCM to DSD etc. A lot of very skilled digital engineers point to the questions being more about making trade-offs, not about which is better – and we agree. There are sound technical arguments you can use to argue either side of the trade-off, but they are still a trade-off.
We have our preferences, but that doesn’t mean they should be yours. The main point to make on this subject is that “it all depends”.
In some situations playing at the native rate of the file is better. Any file conversion is degrading. Any file conversion during playback involves unnecessary services running and therefore interfering with playback.
In some situations the DAC may simply sound better with one file format than another, or with one bitrate than another.
In some situations a higher bitrate will improve the top end but the presence in the lower mid-range on down is diminished.
In some situations DSD sounds more refined and has greater soundstage depth than PCM, but in others DSD will lack immediacy and images will become less focused and solid.
Our advice is this. Don’t fall for someone else’s preferences, thinking that there is a simple hierarchy of what is best. Don’t sell a perfectly good DAC because it does not handle some fancy new format. Don’t insist on only listening to a new format just because the DAC you just bought has a selling point about that new format. You really need to listen for yourself and decide what delivers musical enjoyment in your system, because there are no simple and universal answers in this area.