Topic: Bitcoin is a reliable store of value - what’s a reliable store of value for you? (Read 542 times)

Bitcoin isn't a store of value if you asked me. This is because it's subject to fluctuations and volatility. Anything can happen to make price go wry with it. Pointedly, we've to quickly remember that there were those who bought Bitcoin at ATH in 2021 and of the fact that price has since then not gone back to that range. To those ones, I'm not sure the value of what they invested has yet been recovered. What store of value can that be then? For me, Bitcoin is best described as a speculative asset. I use stable coins as my store of value.

I agree with what mk4 said, scarcity alone does not make a good store of value as there are millions of scarce objects that do not have any good value and can't be classified as a good store of value but there is no doubting the fact that the scarcity a nd limited 21 million circulating supply of Bitcoin made aid it hedge against inflation.

Bitcoin is a digital gold that so decentralized and it price have consistently risen as an asset and a store of value just like gold and any other commodities in the asset class, several factors make an asset a good store of value but scarcity is not among those features.
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Some things are scarce but worthless!2

Yes, the less intervention from governments over bitcoin the better it will be for adopters. We don't need governments' permission to deal with btc. It's a person to person decentralized currency which can be also used as store of value if the individuals wish. Even if governments try to forbid this practice, people will still be able to use bitcoin, because governments don't have any power over blockchain and internet, as they are also decentralized. Of course they can punish citizens who doesn't follow their regulations, but it's still possible anyway.

Yes of course, it is just the opposite of my statement above while I want to convey for the same purpose.

We can find various facts in the data from its price history so it will definitely help us to gain confidence that this bitcoin really deserves to be considered a store of value asset. About the price and the potential future price is something that may fluctuate due to volatility, so I will not compare it to other assets such as gold. But bitcoin can be the best choice instead of fiat which is losing its value.

Certainly gold, the ideal store of value.

The fact is that people still can't distinguish the goal between storing value and expecting value growth which still carries risk. Bitcoin has high volatility which is suitable for the second purpose, bitcoin doesn't meet these conditions:

Some percent of people in the world don't even admit that bitcoin is a legal currency in their perspective

It's just that thinking that Bitcoin is not a good store of value because the price has dropped this year is silly. The price of gold has also been falling since March. The question is whether it maintains purchasing power or even increases it in the medium to long term, and the answer, looking at its history is yes.

There are many people who think that bitcoin is a good store of value because of the potential for growth in its value over the long term rather than the innovation that comes with it. If indeed that is the basic reason why bitcoin is called a good store of value then gold and other real investment assets should be the same too.

Even if these bitcoin are scarce because the supply is fixed at 21 million bitcoin, then we must realize that Bitcoin is a distributed currency system, if demand drops to almost non-existent, then the certainty is that the currency will still crash. People expect its value to keep increasing in the long term as bitcoin is getting more popular it will affect the demand and supply. But one thing that has become a fact is that the value of bitcoin can go down when the demand drops. There is no 100% safe in the world, you still have to think about the risks because supply and demand will not be stable forever.

Real estate could be going up right now and that's understandable because there is inflation, but the cost of keeping the house together should be calculated in when you are selling for sure. If you buy a house for a million dollars, make a half a million dollars cost to keep it for 5 years or 10 years or whatever, and then sell it for 3 million dollars, you made 2x profit not 3x profit and that's important to keep in mind.

Some houses gain x10+ in 10 years, and some only gain 2x, it depends on where you bought the house. Mine gained 10x for example in the last 10 years, and that's a great increase for me but I also spent a good chunk recently as well, I would put that into calculation.

As of now, people still don't want to save with bitcoin, but they prefer USD or gold as a means of savings, which is understandable, because bitcoin's volatility is too high. It can be said that bitcoin is a potential investment as it can yield great returns due to its volatility, but to see it as a store of value is very risky. While USD is still the main currency of the world and bitcoin price is still measured in USD, the stability of USD is managed by the US government, as can be seen in the current crisis, USD is considered a safe asset. People will tend to save in bitcoin only if it is a stable and secure asset with government legitimacy.

Not all countries accept Bitcoin, but only just very few countries which are not up to 15 in total that banned bitcoin in a way it is not seen legal. Some of these countries are afraid of bitcoin, but in reality, it is not like that. See country like El Salvador, their government made bitcoin a legal tender, allowing it to be used for remittance, payment of salary, and p2p payments, yet El Salvador still prefer to save more in US dollars after making bitcoin transaction. I do not think people themselves have the mind set in a way bitcoin would be able to replace fiat.

Yes, I remember that it happened at least once in Ireland as well as in the US, and these confiscated bitcoins were auctioned more than once.
See here for example:
source:
https://www.cnbc.com/2021/08/04/irs-has-seized-1point2-billion-worth-of-cryptocurrency-this-year-.html

Bitcoin does not make it difficult for any country's currency or gradually replace it, if you think that will happen the government will never accept or legalize bitcoin. Once the government legalizes bitcoin, it will inevitably come with draconian regulations to best control bitcoin. If once they find out that the legalization of bitcoin harms fiat or rather directly affects their power, they will ban it immediately.
For bitcoin to grow and be widely accepted, the best way is to get legal consent from the government and let's hope that bitcoin will be another method, alternative, besides fiat.

Can you please mention which countries have confiscated Bitcoins from their citizens or from the people who own them?
Because in the country where I live now Bitcoin is not banned as long as it is not brought into payment terms, because here Bitcoin is legal as a commodity asset and I think there are also several other countries that do not prohibit Bitcoin to be used as a commodity asset.

And I think you also know that now there are several countries that have legalized Bitcoin and adopted it into payment terms like what happened in El Salvador. Indeed what you say looks better because if all the governments of the countries in the world want to legalize Bitcoin for everything, then the growth of Bitcoin and cryptocurrencies will obviously be better, but it will make it a little difficult for the country's currency to be killed slowly by Bitcoin and cryptocurrencies.

All conditions exist for Bitcoin to be considered a store of value except these:
So far people do not accept bitcoin on a large level due to governments rejecting bitcoin so far, bitcoin is not legal in many countries of the world so people are afraid to buy and store it because of the fear that they will get a violation and a legal fine as a result of violating the law, their bitcoin may also be confiscated As it happened in some countries.
So first we need to accept bitcoin around the world by all governments or else we are missing out on an important condition.

To this we need to add that unlike gold real estate can pay for all of those costs if you are willing to rent the property, so not only you have an asset that can follow inflation closely but one which can produce cash flow on its own, this is incredibly valuable as during a crisis having as many sources of income is important, so real estate gives you the ability to diversify your income, which during a crisis can be a real lifesaver.

The taxes in homes or real estate are to be considered as maintenance not real a cost because if we look deeply the estate appreciation value is not stagnant. The house you bought for $3 million dollar this year won't cost lesser two years in the future. This is also like bitcoin, metal or stock that hodlers enjoy during volatile but estate has lower risk especially when insured.

When I think of a store of value, I think real estate. It’s hard to make a case that all the materials used, included land, and the use case of a home is not valuable. The only thing that hurts real estate as a store of value in my opinion is the upkeep costs including taxes. That is why I feel precious metals are also a good store of value. When I think of stocks and Bitcoin, I think growth potential, not store of value.

The problem with bitcoin is that its price is not set completely based on its value, but mostly based on speculation on centralized exchanges that are not that big to prevent market manipulation. This means we always see the price either go higher than the intrinsic value (like the bubbles we have seen eg. $20k in 2017) or go below the intrinsic value (like the current state).

As long as this market manipulation has significant effects on the market, the "store of value" characteristic of bitcoin is not a strong one in my opinion. But regardless of that, bitcoin remains the global payment system providing a very valuable utility.

It is true that at some point the inflation we are going through will go down, but we do not know what it will take for us to reach that point, and since we do not know what it is going to take then we need to do what we can to protect ourselves.

Unfortunately people are so indebted already that most of them simply do not have enough money to invest in anything, which means that they are at complete mercy of the government, and if they fail to lower inflation during the next months and years they will suffer tremendously because of it.

Inflation has happened many times in the past and one thing is for sure inflation will have to come down, one way or another. Deflation is the government's job, they have to deal with it, or their power will disappear.

But what is the cost to reduce inflation? and we will certainly be the hardest hit in any case so it is our duty to protect ourselves, should not trust and depend too much on the government. Once they can't bring inflation down, they'll do whatever it takes to bring it down, maybe they'll use us to bring it down.
Gold or bitcoin is fine, even any asset that we feel is safe with us.

Whether people believe that bitcoin is a store of value or not what matters is that people at least make the effort to put their money in an asset which can keep their value over the long term, whether it is bitcoin, gold, silver or real state it doesn't matter, what matters is that people protect themselves.

And this is more important now than ever because as we can see the inflation is very high and despite the efforts of the governments to try to make it to go down they have failed to do so, and who knows if they will be successful, so for the time being what matters is to protect ourselves in the case things get even more difficult from now on.

I don't think so. Store of value doesn't mean it should appreciate over time. Quite literally, it simply means it is something that stores the value. So if you want to avoid losing your value, then store it in something. It's different if you want to make a profit. That's investment. It is enough for something, even though it does not appreciate over time, to be a store of value for as long as it also does not depreciate over time. And store of value more or less implies long periods of time. If something keeps the value for a short time only, it is not a store of value.

Store of value which means appreciate over time and with Bitcoin, there’s no assurance for that and beside that is not the real purpose of Bitcoin before. For me, if there’s too much volatility I can’t consider that as a good store of value, maybe it can appreciate in price but there’s still a huge risk that it can go deeper so be careful on storing too much of it. Gold might still be the best option to many, i can agree on that.

Same here, that is a reliable store of value for me.  With that, I  believe Bitcoin at its current condition isn't a good or reliable store of value.  Don't misunderstand, I also see Bitcoin as a store of value but  I think its high volatility makes it unreliable as a store of value.  This is another reason why most financial institutions don't consider Bitcoin as money.  Because of its poor performance when it comes to the store of value.

This does not define how reliable store value is. It does not make sense with this kind of mindset. It seems you are just investing which investmen comes with risk and profits over the time.
So, store of value for me is something you not depreciating the value of it over the time regardless of other effects or financial system catastrophic.

You are very right here, Bitcoin is technically advanced compared to Gold because Gold is just naturally existing.

But Bitcoin was customized by Satoshi, so he could look at Gold and improve Bitcoin's properties.
He looked at Gold and made Bitcoin more scarce,
He made Bitcoin more fungible and easier to send
He created an robust network of PoW

Bitcoin is advanced Gold, one could say. 

I wouldn't say reliable, at least, not for the medium term even (and for me that's 5 years or so).

I'm a Bitcoin guy, DCAing for as long as I remember, and have had to liquidate significant sums due to emergencies and while it's worked out for me overall, I can't imagine if my journey had started say in 2017 and then then I needed to rely on it over the next 2 years. Would have been a huge loss.

And if you can't rely on something to retain (not appreciate) value in a year or two, I don't think you can call it reliable, can you?

P.S. I do think it's a great store of value long term, always up eventually!

Bitcoin is still very new compared to gold or currency and we cannot be sure what the future of bitcoin will be. We are bitcoin investors so it is completely understandable to believe in bitcoin, but to be fair, compared to gold and other assets, bitcoin is still riskier.
Bitcoin can still be a store of value but to say it is the best is inaccurate. To be considered a secure store of value, it must be stable, low-volatility, and legally recognized worldwide.

Being a store of value is not a subjective matter. There is an objective definition of what it is:

'A store of value is any commodity or asset that would normally retain purchasing power into the future and is the function of the asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved.

The most common store of value in modern times has been money, currency, or a commodity like a precious metal or financial capital. The point of any store of value is risk management due to a stable demand for the underlying asset.'

Bitcoin is a good store of value, or we could say the best at present, and it does not look like it is going to change this in the future. What happens is that in the bear market that we are in, there are people questioning it,but if bitcoin was not a store of value due to the behaviour of the price this year, gold would not be either. We have to look at the long term when we talk about this.

As long as we have "diamond hands" as they call it these days, then we can make a profit from bitcoin. Bear market is not a reason to sell your coins, if anything it is a reason to buy more bitcoins right now. Haven't we said "buy low, sell high" enough times already? You buy as many as you can during bear run, and you sell as much as you can during bull run and keep repeating that and eventually you will have a lot of money.

I am the type of person who buys at bear and buys at bull, I like to have 1 bitcoin before I die, but I would understand selling at the top in order to buy even more when it goes down, I just don't believe in myself to know when it is at the top.

Hopefully, I can have strong hand to still hold my coins, especially bitcoin. And yes, the bear market still appear on the market and that can make us to become panic. But with experienced we had, we do not have to feel panic instead calm down for a while.

To have bitcoin as a store of value is an option for people, especially if they want to earn big profits in the future. But if they still have doubts about bitcoin, they shouldn't try to invest in it because it will make them worry about seeing the price fluctuate.

Have you considered the risk in the internet space?, The internet is considered a dangerous place that is always lurking and attacking us even when we don't know we are being attacked. Maybe you have a hardware wallet that is secure enough to store bitcoins but that doesn't mean you will be 100% safe holding bitcoin. Not to mention the accidents that cause you to lose your private key due to natural disasters, fires... everyday accidents can still cause you to lose your private key. Can't say which is more secure, it all depends on how we store them.

Bitcoin is a very volatile asset, gold is much more stable so I don't think bitcoin is a better store of value than gold. Bitcoin is a better investment than gold.

In many aspects, Bitcoin is better than gold.

1. Gold is scarce, Bitcoin has a fixed amount.
2. Gold is hard to store, Bitcoin is stored in the blockchain, like in thin air.
3. It is hard to cross international borders carrying gold. With Bitcoin, nobody knows you've got some.
4. Gold could easily be seized. With Bitcoin, it could die with you.
5. With gold, there is the possibility that miners could go out of space and harvest all they want. With Bitcoin, there will only be 21 million even after a thousand years.

So we could probably say that Bitcoin is a better and more reliable store of value than gold.

I guess we might be wrong as we might be comparing it to gold as store of value? Gold has been with us for centuries and I would say has been tested like in WWII wherein it was being used by countries for reconstruction. So it could be a good store of value plus it appreciates overtime. While compare it to bitcoin which is very young and still in it's infancy and the best case for it is the pandemic. But then again, it's very volatile so it won't fall on the definition of store of value, but we can say that it is value is derived from being durable and scarce.

Bitcoin is a store of value but it has massive upside potential. It is still risky but we need to have an overall view at it.
Despite being very volatile, Bitcoin has resulted in massive gains and is likely to do so again, making it a good store of value.

I agree, Bitcoin is proven for a long time and will continue to do so. It is just starting because at some point, Bitcoin has to be inventend and is still new.
But it is reliable and we are just extremely early.

Exactly, Bitcoin is also very useful against dictators like Putin.

You are right, we should not sell Bitcoin in a bear market because it would mean selling at a loss.
Buy high, sell low is not a good option.

As long as you are not going to sell it in a bear market or at least a time that you will never profit then your money is good with it as store of value.


Again, still boils down on how you are going to put your money on it to become a store of value. So it's really up to us per individual on how we are going to make it our own store of value. Because if we look at the price it is very volatile, hence could not be classified per se at SoV.

So we need to wait for that only to see if btc is really a store of value or not? I think that's boring but as of now, many people already trust bitcoin and can say that it's one of the store of value because of its limited supply and as we can see it grew a lot from its over 13 years of existence.

Btc adoption will not decrease but it can only increase since many people didn't knew btc yet. We don't know the exact value of btc but once massive adoption takes place then for sure its value can increase over 100k. Fiat money isn't a store of value not because it's only a paper but because its value depreciates over time due to its unlimited supply.

I still want to keep my money in bitcoins and even though the price will still be as it is now, up and down, I'm not afraid because it's just a part of bitcoin that will probably always be there until later. If you are afraid to save money, maybe you need gold as a place whose price will not change much compared to other types of investments.

Bitcoin is a unique store of value because its price can go down and up, and we never know when that will happen. Apart from that, the rarity of bitcoin is one thing that makes it unique so I think bitcoin is a store of value as well as gold.

I think if Bitcoin already proven survived for many decades and everyone trust it, then Bitcoin can be said as store of value. Bitcoin would resistant against government centralization and dictatorship, but we don't know how much Bitcoin will worth since the adoption will highly decreased.

Fiat isn't a store of value too since it's only created by paper, but since everyone are trusting fiat and believe the value based on the number that written on the paper.

I honestly think that gold is still one of the good stores of value in the market and if I have money to have it, I'll definitely have it. But since bitcoin is existing, it's not my priority and my attention is on bitcoin. For those heavy investors of gold, they'll argue that it's the best store of value, and whilst for us, it is bitcoin that's the best store of value. Don't forget about the other assets that can also be of good store value and is good to appreciate as time passes by like real estate. If I have the chance to have them all, I'll do it.

I think what makes Bitcoin very reliable store of value is its trading capability. It has huge demand from average people, communities. Like if you offered someone Bitcoin with %10 discount to convert to American dollar, 9 out of 10 people would agree to trade with you. This is main reason. Second reason is its unregulated unlimited structure. You can carry money in usb hard wallet in your pocket and noone would ask you anything about it.

What happens is that many people think of bitcoin as an asset or as a stock and they never consider the possibility of bitcoin being a store of value.

But as we know bitcoin was created as a form of money and one of the characteristics money must have is to be a store of value, now it is true the volatility of bitcoin also has an effect about why people do not consider it a store of value, but when we see the long term trend of the price of bitcoin it only goes up, so that makes it a store of value in my mind even if the volatility is quite high.

Artwork is really a fascinating store of value that can increase dramatically, especially if from a known artist. An artwork once displayed or auctioned by Sotheby's, price rockets in the next auction. Not everyone can afford this one though.

If diversification is to be considered, I will still be going for BTC and gold as it's still affordable. They are not just a store of value but an asset to keep.

I don’t consider Bitcoin to be a store of value. It’s a highly speculative asset. When I think store of value, I think things with a very long history of increasing value. That leaves the S&P 500 as the best place to store money, followed by owning your home, and then things like artwork or gold jewelry. Bitcoin is a bet on a new emerging asset class.

you have valid point on this. because a lot are asking, what's the reason why bitcoin has value not only store of value? no one or nothing is backing the value of btc. but it is the technology behind it why we are using it right now. the concept of supply and demand is the reason why we have the market price for btc. and there are so many contributing factors when it comes to the supply and demand aspect.

But Bitcoin's scarcity is making it a good store of value. If it doesn't have a limit, people were not commited to holding it. People always like scare stuff, be it a material or digital (Bitcoin). Bitcoin is doing what Gold is doing best + additional features.

You are doing it wrong. If people are blended by Bitcoin's volatility, such people have missed Bitcoin's 10 year long gains from 1 Dollar to 20k Dollar.
Reality: Bitcoin is volatile and a store of value.

It's because most people seem to want a non-volatile asset when talking about store of value assets, rather than an asset that has long-term appreciation. Hence why a lot of people look at gold as a "store of value" — because it's a lot less volatile despite it performing like crap throughout the years.

The technology behind the bitcoin is the one that makes it a good store of value. It is evident to see a big list of projects that make a comparison with bitcoin. In few months time those projects fade out of the market. So, various factors constitute to make something a better store of value. Consider gold, this is a store of value through its rare availability and it's years of history. With bitcoin it is the technology.

I don't think that the scarcity of Bitcoin makes it a very good store of value.  As a matter of fact, at this moment, I do not consider Bitcoin as a reliable store of value due to its high volatility.  It is also one of the reasons why Bitcoin is having difficulty getting the acknowledgment of the authority of being money despite Bitcoin actually being money.

Yes just because something is scarce doesn’t mean it automatically will be valueuable. Take a classic Ferrari limited edition, it obviously will have huge value. However there are many scarce cars such as a Nissan Rouge convertible, however since nobody wants it, it doesn’t have much value.

Same with many of the alt coins out there.
Many have small supply however they still have low value because nobody wants them.

It is important, undoubtedly. But again, scarcity alone doesn't automatically make something a store of value, or even worth anything in the first place; especially for something that's digital.

But scarcity is most important for it. We can also see some NFT's are very scarce but nobody will consider NFT as a store of value because NFT is not fungible.
In addition, people need a perspective to sell it for a higher price again.

Scarcity in itself doesn't make something a good store of value. I could make a coin that only has a very scarce supply of 10 coins, and it would end up being worthless.

It's Bitcoin's decentralization and censorship resistance (among other things) is what makes it attractive to people. Bitcoin being scarce and having a predictable inflation schedule just completes the entire package.

For our savings, it’s very important to convert our money, or some of it, into a store of value to keep it safe from devaluation and to keep purchasing power.
Saving is very important and only a good store of value is suited for savings to prevent devaluation.


But how is a reliable store of value designed?

Finding out, what a good store of value is about will lead us to few conclusions:

It should be proven to be scarce.
It should be easily transported and easily exchanged.
It should be easily divided and keep value (not go broken).
It should be accepted and people should consider it as a store of value.

We can see: all points are somehow important to define a good store of value. Since a long time, Gold is considered as a good store of value but also Bitcoin is designed as a store of value, it’s also called digital gold.

Bitcoin is limited to 21M Bitcoin making it a very reliable store of value!
Since Gold existed, it has been store of value number one but now, we have Bitcoin, competing against Gold as a store of value.
We can compare advantages and disadvantages of Gold / Bitcoin and some people might consider Gold and Bitcoin to have as a store of value
Which is very good for Bitcoin because currently Bitcoin is only 5% of Gold's marketcapitalisation.

Bitcoin will close its gap to Gold in terms of marketcapitalisation.


Many stores of value are existing and we should always consider for and against arguments.

What is a good store of value for you?
What makes it unique, what is a must have for a store of value?

In my opinion it’s proven scarcity and Bitcoin is very good at it.


HODL

wagmi