Can we agree BTC is not a store of value?

[BITCOIN4X]

Bitcoin's price movement is mostly controlled by traders in the short-term. But in the long-term, hodlers will ultimately decide the price movement. Bitcoin price long-term has been up. That suggests a growing number of hodlers. Data also suggests growing hodlers.

I would say that the price of bitcoin is entirely determined by active traders and not just most of it because the market is always active and prices continue to fluctuate then I think both in the short run or in the long run prices will still be determined by traders.

Holders will enjoy the benefits of active trading results carried out by traders today if the price exceeds the issued capital and will suffer losses if the trader currently wants a lower price. Suply and demand made by traders today will determine whether the holder gets profit or loss.

5-10 years isn't really a long term, I bet nothing will seriously change in Bitcoin - the price will be higher than it is now, but it still would be speculative and risky. If some other major crisis will happen at that time, Bitcoin would probably react just as it did now.

Agree with you, there is no certainty about the price of bitcoin for a long time and the price can still be 5 times higher than now and also can still be lower. Many things can affect the demand and supply in the market and one of them is the crisis and even global health problems such as a pandemic.

[arrmia11]

We can never agree on that because each individual investor have their own narrative. By the way, this topic is related to this https://bitcointalk.org/index.php?topic=5232642.0

Yes indeed because every investor have they own opinion on their own we can't force them to do on what we want to do we need to cooperate with them we dont meed to tell them on what they gonna do, just like you said they have their on narrative and we cant blame them.

[webtricks]

Bitcoin is digital currency payment and not store value, when your store can accepted bitcoin as payment transaction is not make you must have the same value between your store and bitcoin. Just looking how many people are interested with your accepted payment method using bitcoin and how much advantage than using cash money and bitcoin transaction.

I think you have misinterpreted the definition of 'store of value'.

Store of Value means storing the value in something and use the same value in future. In other words, anything which makes us capable of transferring purchasing power to future is store of value.

Your first line says,
Bitcoin is digital currency payment and not store value

But in reality, money is the biggest and most widely used mode of store of value. In fact, store of value is one of the three fundamental functions of money, other being medium of exchange and unit of account. For example, if I have 100 kg wheat but I only need 10 kg for now and I am worried that rest will perish, then I will simply sell the rest and keep the money in my wardrobe. Once my 10 kg wheat finishes, I will buy more with the money from my wardrobe. In this way, money acts as a store of value for 90 kg wheat which could be used in future.

However, in real world, money as a store of value fails due to the inflation. Hence more modern forms like bonds, etc are preferred as store of value.

People also think that stocks and Bitcoin (or cryptocurrencies) are store of value too. But we shall never consider such volatile assets as the store of value. We invest in such assets for returns. Store of value is conservative economic goal while return on investment is aggressive economic goal. So BIG NO! if you are investing money in Bitcoin to store value.

[o_e_l_e_o]

That was the point.

Another big fall of around 3% in most markets today, on the background of ongoing downward trends. This is despite the Fed announcing unlimited quantitative easing, which is absolutely crazy. Setting no limit on the amount of money they will print or the amount of bonds or assets they will buy is unprecedented, and certainly far more than they have ever done before. They announced another $4 trillion today in the first instance, which is more than they printed over several years following the 2008 crash. Meanwhile, we are looking pretty similar to both 1987 and to the Great Depression, with no signs of stopping anytime soon.





Interesting that while the markets fell further, bitcoin has reversed and has climbed again. Is this in direct response to the Fed effectively turning USD in to monopoly money?

But in reality, money is the biggest and most widely used mode of store of value.

True, but fiat money is a terrible store of value. USD has lost >95% of its value over the last 100 years, and given what I've just discussed above, it's about to lose a lot more.

[webtricks]

~~

Ain't FED looking so much desperate? I fear depreciation of US Dollar will impact most of the global currencies because major portion of the FOREX maintained by many countries is in US Dollar.

But in reality, money is the biggest and most widely used mode of store of value.

True, but fiat money is a terrible store of value. USD has lost >95% of its value over the last 100 years, and given what I've just discussed above, it's about to lose a lot more.

Yeah. I stopped considering fiat money as a store of value, the day I learnt about 'Minimum Reserve System'. In India, central banking authority i.e. RBI can print any amount of currency as long as it maintains the minimum reserve of 2 billion Indian Rupees (~ $26M) in gold and Forex (62.25% gold and 37.5% Forex). I mean really! You guys are printing n number of notes just because you have some $26M value of gold and Forex underlying!

That's the most awful concept I read during my graduation years. This clearly shows why Indian Rupee is too prone to depreciate over years. Minimum Reserve System was adopted in India in 1956 and since then INR have depreciated 97% against US Dollar.

[o_e_l_e_o]

In India, central banking authority i.e. RBI can print any amount of currency as long as it maintains the minimum reserve of 2 billion Indian Rupees (~ $26M) in gold and Forex (62.25% gold and 37.5% Forex). I mean really! You guys are printing n number of notes just because you have some $26M value of gold and Forex underlying!

It's a ridiculous system, but the Fed have gone a step further with USD over the last week. They have given both themselves and all major banks the ability to print as much money as they want without any requirement whatsoever for any amount of reserve. They can buy unlimited amounts of bonds, assets, securities, etc., and have said they will buy "as many as needed", without having any kind of reserve. Meanwhile, banks have had their minimum reserve requirement cut from 10% to 0%, meaning they can create and lend unlimited amounts of money to each other and their customers, again, without any kind of reserve.

If I launched an altcoin and said it was worth 1 USD/INR/EUR/whatever, but then also said that I can create unlimited amount of new coins out of thin air as and when I please, and that I've also given that same power to a bunch of my friends, and we can all simply create coins to buy anything we like or dump them on the market whenever we please, I would be called a scammer and flooded with red trust. But for some reason when the government does it, everyone is cool with it?

Fiat is a scam.

[freddy2020]

Bitcoin is def a store of value, way more so than gold.

What is gold? an unlimited inflationary resource.

People who think Bitcoin is just a digital payment system for microtransactions are plain wrong. POW is in no way meant to be used to confirm small payments. The "cash trolls" chains are plain wrong.

[Questat]

That's the problem when you panic right away, the time you made this thread, there was a panic selling, bitcoin dropped and  we thought this will take time to recover, but, look at the market now, bitcoin is likely to hit $7000 again if the uptrend will continue, then we can say that it's a store of value now.

FED print infinite cash, so bitcoin is a store of value, aside from gold of course.

https://cointelegraph.com/news/bitcoin-price-surging-toward-7k-after-fed-says-it-has-infinite-cash

[freddy2020]

That's the problem when you panic right away, the time you made this thread, there was a panic selling, bitcoin dropped and  we thought this will take time to recover, but, look at the market now, bitcoin is likely to hit $7000 again if the uptrend will continue, then we can say that it's a store of value now.

FED print infinite cash, so bitcoin is a store of value, aside from gold of course.

https://cointelegraph.com/news/bitcoin-price-surging-toward-7k-after-fed-says-it-has-infinite-cash

That's the problem when you panic right away, the time you made this thread, there was a panic selling, bitcoin dropped and  we thought this will take time to recover, but, look at the market now, bitcoin is likely to hit $7000 again if the uptrend will continue, then we can say that it's a store of value now.

FED print infinite cash, so bitcoin is a store of value, aside from gold of course.

https://cointelegraph.com/news/bitcoin-price-surging-toward-7k-after-fed-says-it-has-infinite-cash

I agree with you.
Even when price is down its valuable. 7000 is massive, but still such a small number. 1 million is going to happen, so is 100 dollar transaction fees.

[mindrust]

China might be hiding its real numbers though. I don't blindly trust any information China puts up.

BTC is a store of value only if you have proper risk management. I learnt it by the hard way.

[TheGreatPython]

Can we now call it a store of value? Because, as you can see while the world is going to shit and many nations are at the blink of bankruptcy and IMF is offering TRILLIONS in relief efforts with close to zero interest rate so all in all the economy is terrible right now.

However crypto is recovering, many coins are amazingly high, that is why there is a store of value talks going around in crypto, that is why bitcoin should be held no matter what. Hell there is a dilemma that since bitcoin will ALWAYS go up forever in the long run, so whenever you sell bitcoin you are losing money in the long term, so if you buy it and you can't sell it, that means its futile, so in order to make it profitable, you have to sell and lose on future profits and just take the current profit.

[Vishnu.Reang]

There can be arguments both against and in favor of this. Bitcoin satisfies certain conditions which qualify for usage as a store of value. For example, it is protected from inflation through the principle of controlled supply, and at the same time it is not controlled by any of the central banks or financial institutions. But at the same time, its volatility and limited liquidity goes against the usage for such purpose.

[o_e_l_e_o]

What is gold? an unlimited inflationary resource.

In what way is gold either unlimited or inflationary?

FED print infinite cash, so bitcoin is a store of value

It is interesting that bitcoin decoupled from the ongoing stock market crash and reversed direction at the same time the Fed announced they would print an unlimited amount of money. Simply coincidence, or are people starting to realize that bitcoin is a great hedge against fiat/monopoly money?

1 million is going to happen, so is 100 dollar transaction fees.

Even if bitcoin hit $1 million (and that's a massive if), then a standard one-input-two-ouput SegWit transaction of somewhere around 200-300 vbytes would still only be $2-3 at 1 sat/vbyte, so $100 is a bit of an overstatement. And that's without even considering off chain solutions such as Lightning.

[mersal]

Bitcoin is nit a store of value,its is a currency which holds its value from demand and supply.But currently its like more than a store of value,it seems like a life saviour since price starts to recover from the huge fall when the whole global economy got collapsed due to the corona pandemic reaction.

[South Park]

Well, it used to be, but somewhere along the way that changed for a reason we have no idea why. I mean normally bitcoin price was at least acting as if it was a store of value but now its not and its not even all that long ago neither.

Just remember couple months ago when Iran and USA had a trouble, remember how the price went up? That shows that just a month or so ago people were thinking how bitcoin was a store of value and they were running away from a war and putting their money into crypto. However today, just a month or so later we see it going down like crazy with everything else.

So, all we can say is that bitcoin is basically a store of value whenever people want to and not a store of value whenever people just do not want it. We can't know which one will happen when.

Historically at the beginning of an important crisis everything takes a beating and goes down in price, at the time this seems to dispel the idea of any asset being a store of value and many people prefer to keep their usual behaviour even under those difficult circumstances, but after some time assets that are a store of value begin to recover their value and keep growing as governments try to resolve the situation but instead they make it even worse, bitcoin is now above 6700 and its recovery has been really quick especially if we compare it to the stock markets that are still in a bad position after the crash they suffered.

[dnprock]

Long-term, Bitcoin is a Store of Value.

Short-term, Bitcoin is a speculative asset.

By long-term, I mean the time horizon is 5-10 years (more than 1 halving). This is my current thesis. We can divide Bitcoin owners into two groups: long-term hodlers and short-term traders. The groups are somewhat fluid. Some hodlers switch to trading. Some traders switch to holding.

Bitcoin's price movement is mostly controlled by traders in the short-term. But in the long-term, hodlers will ultimately decide the price movement. Bitcoin price long-term has been up. That suggests a growing number of hodlers. Data also suggests growing hodlers.

People will move their money around. Know your long-term timeline. Ignore short-term price movement.

5-10 years isn't really a long term, I bet nothing will seriously change in Bitcoin - the price will be higher than it is now, but it still would be speculative and risky. If some other major crisis will happen at that time, Bitcoin would probably react just as it did now.

Bitcoin today is ten times higher than it was 4-5 years ago, and still it is just as volatile. It will take really-really long for Bitcoin to become a mainstream asset like gold, if it will actually happen.

I agree that the return is not guaranteed. Even the famous Stock-to-Flow model is showing weakness in this downturn. I put 5-10 years for reference. Adults working timespan ranges 40-50 years. Volatility does not disqualify SoV function. Gold is highly volatile as well. The most important feature is retaining value over time. If an asset can deliver an above-average return, I would consider it a Store of Value.

Bitcoin's price movement is mostly controlled by traders in the short-term. But in the long-term, hodlers will ultimately decide the price movement. Bitcoin price long-term has been up. That suggests a growing number of hodlers. Data also suggests growing hodlers.

I would say that the price of bitcoin is entirely determined by active traders and not just most of it because the market is always active and prices continue to fluctuate then I think both in the short run or in the long run prices will still be determined by traders.

Holders will enjoy the benefits of active trading results carried out by traders today if the price exceeds the issued capital and will suffer losses if the trader currently wants a lower price. Suply and demand made by traders today will determine whether the holder gets profit or loss.

5-10 years isn't really a long term, I bet nothing will seriously change in Bitcoin - the price will be higher than it is now, but it still would be speculative and risky. If some other major crisis will happen at that time, Bitcoin would probably react just as it did now.

Agree with you, there is no certainty about the price of bitcoin for a long time and the price can still be 5 times higher than now and also can still be lower. Many things can affect the demand and supply in the market and one of them is the crisis and even global health problems such as a pandemic.

There's always a group of hodlers who are constantly buying bitcoins. They do affect the price. The data has shown a growing number of hodlers.

https://plotly.com/~unchained/37/bitcoin-utxo-age-distribution/#/

The current 5y hodler sits at 21%.

[beerlover]

How do you decide if something is store of value or not? I mean do you look at it during bad times only? Do you look at it over time only? What makes something just a store of value thing? Look at gold for example, it literally dropped during this period and it is widely regarded as the most store of value thing in the world.

People literally buy grams of gold all around the world for store of value and in case anything goes bad, that's GLOBAL, we are talking about trillions of dollars. So, if you think bitcoin is not a store of value because of the drop we had this month, do you also think that gold is not one as well? I doubt anyone could say that. In all regards bitcoin IS a store of value, just not all the time and also not as commonly known as gold, that's it.

[Kasabus]

How do you decide if something is store of value or not? I mean do you look at it during bad times only? Do you look at it over time only? What makes something just a store of value thing? Look at gold for example, it literally dropped during this period and it is widely regarded as the most store of value thing in the world.

People literally buy grams of gold all around the world for store of value and in case anything goes bad, that's GLOBAL, we are talking about trillions of dollars. So, if you think bitcoin is not a store of value because of the drop we had this month, do you also think that gold is not one as well? I doubt anyone could say that. In all regards bitcoin IS a store of value, just not all the time and also not as commonly known as gold, that's it.

Bitcoin may not be a store of value for the present time because the government are still crashing into fiat for basic purposes. But i believe soon it will be a good store of value when all countries take part in using it as a currency just like what they did when fiat currency was still newly introduced.

[BitcoinTurk]

Unfortunately, we cannot evaluate Bitcoin as a means of value retention, while even investment instruments that are considered safe ports in today's market conditions have a very unstable price movement. In addition, if we comment outside of today's market, I would like to say that Bitcoin will never be used as a value storage tool because large investors can control the price easily. As such, no investor will want to hold his money in such a manipulative investment instrument to protect himself. Regardless of today's market conditions and the conditions of Bitcoin and crypto markets, unfortunately, the situation you are talking about does not seem to be possible. I don't know if there will be a change in the coming years, but my opinion is that Bitcoin will never be a value storage currency.

[bearexin]

Bitcoin is a currency, it was always seen as a currency when it was created, it wasn't a commodity, it wasn't an investment, it was something you use, you earn, you spend, not something you buy and sell. At least that is how it first got created, after a while we realized that maybe we are wrong and we started to see it as an investment and that is when things started to change. What do you talk about the most when you talk about bitcoin? It is usually the price isn't it?

People talk about the price of bitcoin more than any other feature of it. Which is why it was said that it could be a store of value, it still could be but that wasn't the point of it to begin with. Hopefully one day people will realize that bitcoin is actually just a currency and not a commodity.