Topic: Hi Excuse me Are currencies a "store of value - page 7. (Read 1806 times)

If you want to have a store of value in a currency then cryptocurrency will be your best bet. Bitcoin, specifically, is the best store of value when it comes to cryptocurrency because it is what most of the people preferred to invest in since it is the very first cryptocurrency and it is the alpha of the cryptocurrency so everyone is affected by its movement.

Agreed, even if you invest on gold bars you'll be getting a small percentage of copper mixed with it. Without copper it is hard to combine it into bars. As you said when it comes to jewelry we're paying high for whats been got. From a person who does gold ornaments came to know that from 1kg of pure gold they used to make 1.4kg - 1.5kg of different gold ornaments. This is the ratio of copper mixing with gold jewels.

there s no sence to talk about inflation for a currency with such high volatility as BTC.

And do not forget about market volume. It s so small

I don't think a currency is a store of value because in reality its value can move from being very valuable to something terrible when a monetary crisis occurs, and therefore saving value will be better for an asset such as gold and even crypto. These are all choices that at least a value from any asset will always move but with different fluctuations, so I don't think anyone can really maintain the value that is being discussed about storing values.

Paper money is subject to inflation, so it is not the best way to save value. Of course, the best in this regard are our eternal values - gold, precious stones and jewelry, antiques, real estate.
Cryptocurrency in this regard, probably, occupies the last places due to its high price volatility.

Anything which has inflation is not good to be used as store of value but still many people not aware of it and losing their asset value when they kept it in the form of fiat.We may call bitcoin as store of value but still its completely not due to its volatility nature so just find something which has constant value and demand then it will be the best.As far as I know gold is the best to be store of value.

I understand the devaluation of each country's currency. But everything has 2 sides. fiat money is often affected by many factors such as politics, trend, government default or the growth of the country, ... it makes the value of fiat money fluctuate quite a lot. As for cryptocurrencies, you are always praising it as a wonderful asset and never suffer any influence if the politics of some countries have problems. But how do you know that when the crypto market first appeared 10 years ago? Besides, have you ever thought that such a currency really exists or not? Or are they just numbers on the screen? For me, fiat money is still one of the best and most valuable payment tools for assessing power across countries. this world should not have a common currency, so it would be unfair for the developed countries.

Fiat is not store of value at all, however gold is the best case of store of value there is in the world, even compared to bitcoin.

Gold does lose its value time to time but that is very rare and manipulative, normally gold is something scarce and there is not enough gold in the world to spend at the rate we keep on spending, people think gold is only used in storing of wealth and sometimes accessories but there are stuff in technology that uses gold as well, hell there is gold in every computer (even tho it is super tiny) so all in all we do spend gold and sometimes trash it as well and that is why gold is getting even more scarce, so it will always have store of value, even more than bitcoin which drops time to time depending on how much people value it.

Yep, currencies can be a store of value. Where I live, the US dollar is not our currency but there are some people who are always buying the US dollar as a store of value, and not only USD, including Euros and Pounds Sterling. So, anything can be a store of value and these people are using these currencies as a store of value because they believe that they are stronger than our country's currency, so that makes it a perfect choice.

I used to do that and later stopped before discovering Bitcoin, and I also make use of Gold to store values. First time I started storing my money with gold was around the time I discovered BitGold, an online platform where you can buy gold and store in your wallet and also sell it whenever you want. After they merged with one other company, that's when I stopped investing in gold. The app made it easier. Now I'm into Bitcoin and Ethereum, but I will still look for a means to invest in Gold because of its stability.

But the Swiss franc and the Norwegian krone, for exemple, are (still) often considered as store of values.
We have even seen a rise recently (like gold did), probably caused by central banks' monetary policies and negative interest rates. IIRC the swiss bank had to intervene because their currency was going up too much (or too quickly)
The Yen is too used as a SOV sometimes, due to capital being repatriated to Japan during politic and economic conflicts.

Around 50 years back Indian currency has performed better than USD and any other currency that got used globally. Things changed when Britishers conquered India and started to divide and rule. This way slowly the wealth has been eroded and finally when India got its freedom, in terms of growth Britishers made big changes within the country which is done for their trade needs and money value has gone to nothing from the top. Gold/silver and other valuable metals were initially given value by the kings that ruled the different parts of India.

This. I would also like to note that countries suffering from hyperinflation like Venezuela are hoarding USD and Euros to protect their wealth (to a scale even larger than crypto), so we can clearly see that fiat can fill that role perfectly well in real world use. It's also literally a property of money:


It has to be said that there are clearly better options for that if you want long-term storage, but nothing beats it shortish-term considering its liquidity.

I don't the main point of the dollar was to be a storage of value. It's possible it was created for that purpose, but it's very fair to say that was just not going to happen after it became widely used as a payment method, and it's very hard for an asset to retain it's value, while being used for payments, while the government also constantly injects more of the currency in the economy.

Answering your question, I do believe that even though cryptocurrencies are volatile, it is fair storage of value and this is mostly due to the limited supply and public perception it's gained as an investment option, not a payment option.

You forgot to take note that gold is much easier to hoard. I'd rather store my valuables in form of property that will generate more value eventually. As you have said gold has not seen any huge price difference with the past years, making me think of the value of yesterday is as is the value of today.However looking upon the value of properties over time, we can see that price per any measurement increases with time just passing by. What is really the reason why fiat losses it is because of too much savings from us. As we see fiat being an asset rather than currency the more it weakens the economy.

When you are talking about something losing its value, please specify the time frame, because it looks confusing otherwise. US dollar has lost 95% of its purchasing power since 1799. But, on the other hand, can you name a currency which has performed better than that? Also, with regard to the economy, inflation isn't a bad thing, rather its an intrinsic part of of the economic growth the modern world has been experiencing.

Regarding your question, currencies must be used as a medium of exchange, in the first place. The more people use them as an asset, the worse for the economy.

Actually, Bitcoin will have an inflation rate of ~1.8% next year as the reward halving takes place. The general assumption of an okay fiat inflation rate is 2% (has definitely been higher in the last years in most countries), which means that Bitcoin will inflate less than fiat, and actually increase people's purchasing power over a longer period of time.

In 2024 the rate of inflation for Bitcoin will be ~0.9% which is just insanely low. I'm pretty sure that the market as always will front run this event and reflect the super low rate of inflation a year or two before the 2024 halving. In other words, getting in now is quite a good time if you have the free capital that you won't be needing in the forthcoming years.

Well yes. But property isn't generally used to help the economy restore itself, but rather gold. Gold has been known to be one of the steadiest properties that have not seen any huge changes in its price in the recent years. With Fiat currently collapsing literally on us, gold would still be the best choice instead of properties. Sad to say about how America has been printing money though. They know what is the issue but they refuse to address it and is instead preparing for another economic crash like the last time.

They will be as soon as adoption ends. Until then since more and more people use cryptocurrencies they are over long term more like increase of value.   Emission inflation under Golds one 1.7% grantee that. Bitcoin will reach that in 5 years time. Other cryptocurrenicies some faster other slower.

Money as a store of value. When a currency functions as a store of value, the owner certainly has the hope that the currency he holds can be obtained easily and can be exchanged for goods or services in the future according to his needs. The economic value of the goods or services purchased in the future is expected to be the same as the money used or stored today. Here money is forced into a stable value storage device.

Money is not included in the utility function because the benefits we get are not from the money directly, but from its function as an intermediary to change one item into another item. Motive demand for money is to meet the needs of the transaction (money demand for a transaction), not for speculation. The impact of changing the function of money from being a medium of exchange and a unit of value into a commodity can be felt now, known as the "Bubble Gum Economic" theory.

If money is already considered as a store of value and wealth, there will be a lot of hoarding and speculative holding of money which will result in impeded exchange of commodities, goods, and services in the economy. This is because theoretically, speculative holding of money says that people can speculate about changes in interest rates in the future, including changes in bond prices on the bond market.

Currency in specific I think has more properties than being just a store of value. Some currencies can do that better than others and when government issued money was backed by gold and had a certain amount of gold tied to it, it was better as a store of value. But in terms of being able to store value immutably, BTC is better that any form of FIAT due to trustlessness. If the metric we care about is price stability though, crypto and BTC are lacking.