Bitcoin is a Store of Value

[witcher_sense]

But it IS very useful for buying "goods". Especially for buying "goods" like Heroin. No one can stop you.  

I believe you also made the point I'm making, censorship-resistance.

Cash is also useful for buying plenty of things including illegal ones. And it even doesn't need decentralized systems in order for cash to not be controlled and stopped. But this doesn't mean everyone would use cash for buying illicit stuff. It is money that is why you can buy everything you need and everything that has market value. If it were impossible to buy something useful with using of cash, it wouldn't be called money. Exactly the same happens to bitcoin. Bitcoin as a good example of money, probably the best money ever created by humans, can be used for buying both good things and not so good things. Otherwise, it wouldn't be money.

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[TheUltraElite]

Yes, bitcoin volatility is the biggest risk that makes some people reconsider investing.

Is it not the volatility of the stock market that makes traders become attracted to it like bees to flowers? Similar case here. People buy bitcoin because they speculate on its prices to go up and sell to make a profit. Although the volatility a few months back was less than 5% per day but now with the halving coming in the prices have been soaring and dropping.

In addition to funds, investing in bitcoin also requires mental readiness, as if we are marketed. But this decade is enough to prove that bitcoin can be a very good alternative.

Investing in any risk based reward system need mental preparation and more important an entry and exit strategy. People fail mostly with all of these points and this leads to wrong decisions in the middle of the market and what we popularly call as "gone rekt".

[ene1980]

Yes, bitcoin volatility is the biggest risk that makes some people reconsider investing.

Is it not the volatility of the stock market that makes traders become attracted to it like bees to flowers? Similar case here. People buy bitcoin because they speculate on its prices to go up and sell to make a profit.

You have a point with some investors viewing every market as speculative but there is major difference between a traditional stock market where the performance of the company can be monitored and their profit determines how well the price goes but in bitcoin there is nothing to base your valuation as it is speculation and luck.

As TUE mentioned the entry and exit is important in any investment not just bitcoin.
 

[kryptqnick]

Not gonna panic for short term as a dump and a pump is quite normal for an asset that most of the volume are own by the whales.

It remains a store of value as long as we have its price on the rise or at a stable price, of which increasing price is always possible in the long term. So it becomes a good store of value provided you know the risks.

I think one of the key factors we should take into account to answer this question is how Bitcoin is used. If people use it to buy stuff, it's money. If they hodl during the hard times, it's a store of value (even if Bitcoin is going down but people keep holding it). Here we encounter the problem of 'people' as different humans use Bitcoin in different ways. For me, Bitcoin is something I'd like to be money, but effectively is a store of value. For a person who was about to lose a fortune because of holding stock that went rapidly down due to the pandemic, it can be a save haven. For people who bought some BTC with the stimulus money from the US it's an investment opportunity. Bitcoin is certainly many things, and perhaps we should look at how it's used rather than argue how it's supposed to be used.

[Botnake]

Not gonna panic for short term as a dump and a pump is quite normal for an asset that most of the volume are own by the whales.

It remains a store of value as long as we have its price on the rise or at a stable price, of which increasing price is always possible in the long term. So it becomes a good store of value provided you know the risks.

I think one of the key factors we should take into account to answer this question is how Bitcoin is used. If people use it to buy stuff, it's money. If they hodl during the hard times, it's a store of value (even if Bitcoin is going down but people keep holding it). Here we encounter the problem of 'people' as different humans use Bitcoin in different ways. For me, Bitcoin is something I'd like to be money, but effectively is a store of value. For a person who was about to lose a fortune because of holding stock that went rapidly down due to the pandemic, it can be a save haven. For people who bought some BTC with the stimulus money from the US it's an investment opportunity. Bitcoin is certainly many things, and perhaps we should look at how it's used rather than argue how it's supposed to be used.

If we like to see bitcoin as a good store of value, then we should hope for a massive adoption as only the real demand will appreciate its value.
Right now, it's still controlled by the whales, but in the future, quantity of users will beat them as they can't have this kind of power forever, so for now its not a good store of value but if you believe on its future, you should start holding now.

[TheUltraElite]

I think one of the key factors we should take into account to answer this question is how Bitcoin is used. If people use it to buy stuff, it's money. If they hodl during the hard times, it's a store of value (even if Bitcoin is going down but people keep holding it).

We can find a similarity with Gold and other precious metals here. People buy Gold because of its store of value but it can be sold anytime in the market. These are assets and not derivatives hence they are having a store of value but selling for liquid cash is possible.

Here we encounter the problem of 'people' as different humans use Bitcoin in different ways. For me, Bitcoin is something I'd like to be money, but effectively is a store of value.

It also depends on usage availability you know. People living in countries where bitcoin is not used, but they are buying bitcoin hoping in future their governments will allow it, is a risky bet but a worthy one if it works out.

For a person who was about to lose a fortune because of holding stock that went rapidly down due to the pandemic, it can be a save haven.

This is tough to actually execute. Selling bitcoin in every country is not always possible. Only then you can buy stocks.

For people who bought some BTC with the stimulus money from the US it's an investment opportunity.

Eh, thats an exaggeration, people are mostly using it to buy essential stuff, live first then invest.

Bitcoin is certainly many things, and perhaps we should look at how it's used rather than argue how it's supposed to be used.

The conflict of interest occurs because some people are disgruntled on price changes and they want everyone to hold bitcoin. That is not possible.

[hv_]

Well to be honest, going by the proposed concept of bitcoin and the blockchain as written by Satoshi Nakamoto in bitcoin's whitepaper, the digital asset was meant to be a store of value and a alternative to FIAT currencies to provide a decentralized financial institution. however, going with the volatility that has ravaged the cryptocurrency market, i can't help but consider bitcoin as a speculative asset for taking off profits.

Correct

esp once the major cash function ( see the title of the white paper) was ripped off by btc devs and now you pay 5$ or more txs fees

thats a poor joke

[Cnut237]

Long-term, Bitcoin is a Store of Value.
Short-term, Bitcoin is a speculative asset.

I do get annoyed by people saying 1) bitcoin is supposed to be a safe-haven store-of-value, therefore 2) people should having flocked to bitcoin once CV19 hit, which didn't happen, therefore 3) bitcoin cannot be a safe-haven store-of-value.
I agree with your summary above in the sense that bitcoin is currently and was previously a highly speculative asset, and has the potential at some point in the future to become a store-of-value.
Bitcoin now and bitcoin 'end state' are very different things.

If you think Bitcoin is a store of value at any time frame, you are marking yourself as a moron.
Store of value need to be stable, bitcoin is never stable.
It either shoots up in price or crashes down, stable it has never been!

Your third line, I agree.
Your second line, I would argue that a store-of-value should increase, at least intermittently (we are measuring against fiat). Bitcoin needs to be stable if it is to be used as a currency, not as a store-of-value.
But the reasoning in lines 2 and 3 undermine your first line, because you are talking about the past. You can't say that bitcoin will never in future be a store-of-value ("at any time"), and base this conclusion entirely on what bitcoin has been so far.
Bitcoin certainly has the potential to become a safe-haven and a store-of-value. Of course it isn't yet, because of the volatility, which is largely a consequence of the comparatively thin markets... but it's difficult to deny that potential.

[fullhdpixel]

Some people are really confused to be sincere. I don't know what they see Bitcoin as . Just during the pandemic they were saying that Bitcoin is not a store of value and they said a lot of things that really annoys, and moreover nobody said that Bitcoin is a store of value, it's called a peer-to-peer payment method. If you choose to make it a store of value, then it's up to you.

Looking at the Bitcoin chart on a long term as the op has said, you will notice that if you have been holding Bitcoin for a long term you would have made profit, because the price keeps growing every year or two. But that's not how most people see it, they want the price to keep going up every time they invest their money.

[Excell110]

After last week's price crash, I saw some discussions regarding this topic. I have not changed my thesis. I wrote a post to explain my view.

Original Post: https://bitflate.org/post/2020/03/17/bitcoin-is-a-store-of-value.html

This article expresses a personal opinion of the Bitflate developer. It is not investment advice.

TL;DR

Long-term, Bitcoin is a Store of Value.

Short-term, Bitcoin is a speculative asset.

The coronavirus is spreading across the world. The US economy is feeling its impact. In time of crisis, people are dumping equities for cash. Crypto market had a hard crash last week. Bitcoin dropped more than 50% on March 12, 2020. Bitcoin analyst, Nic Carter, pointed out that it was the 2nd worst percentage drop in recorded history of Bitcoin trading. The worst percentage drop happened in 2013. This Bitcoin’s price drop coincides with the US stock market crash. This correlated price movement challenges Bitcoin’s value proposition as a safe haven Store of Value.

The magnitude of price drop shattered many bitcoin owners. They’re quick to dump and start to question the safe haven SoV thesis. This is understandable. As we are introduced to Bitcoin, the first most enduring thesis we hear is the Store of Value. The stock market drops 5-10% a day during this crisis, while the Bitcoin Store of Value drop 50% in a day. Bitcoin is peculiar. It lives in the fringe and extremities of our psychology. Can a Store of Value be extremely volatile? I think the answer is yes. We consider how we view Bitcoin in the short-term or long-term.

Bitcoin’s short-term price movements are dependent on traders

Bitcoin is a global digital currency. People trade it 24/7. There is no circuit break. No authority can intervene to stop its price movements. If we divide Bitcoin owners into hodlers and traders, we can see that traders dominate Bitcoin’s daily movements. Occasionally, hodlers will switch to be traders and vice versa. When Bitcoin price crashes, some hodlers may become anxious and start dumping their bitcoins.

Traders want to make money. They think short-term. They live off price movements. Bitcoin’s short-term price trend is speculative. It’s difficult to understand its daily price actions. With the stock market index, when many stocks can crash, some stocks remain well positioned. For example, this crisis greatly impacts Boeing due to decrease in air travel. But Costco benefits from increase volume. Bitcoin is a solo asset. Therefore, its price movement is very volatile.

Bitcoin’s fundamentals remain strong

During this price crash, we saw Bitcoin’s price dropped below $4k. But it bounced back and has hold above $5k in the past few days. This likely indicates that long-term investors remain holding and buying.

We see how Bitcoin price can make sudden and drastic changes. This recent price crash is entirely caused by external factors. Bitcoin’s fundamentals change very little. Besides a hashrate drop, we don’t see any other change in how Bitcoin trades and operates. It is still producing blocks every 10 minutes, or maybe a little slower. It is still issuing 12.5 coins for every block for the past 4 years. It is still secure. Bitcoin’s fundamentals remain strong.

Bitcoin is a Store of Value

If we zoom out the hours, days, and months of the Bitcoin price chart, we can see its long-term price trend remains up. The currently crisis is caused by external factors. The coronavirus is impacting the world’s economies. A sudden panic is causing people to flee asset markets. This has not changed Bitcoin’s value thesis. Long-term, Bitcoin is a Store of Value.

By long-term, I mean the time horizon is 5-10 years (more than 1 halving). Bitcoin’s price movement is affected by traders in the short-term. But in the long-term, hodlers will ultimately decide its price trend.

Long-term, Bitcoin is a Store of Value.

Short-term, Bitcoin is a speculative asset.

When to dump Bitcoin

People will move their money around. I follow but usually ignore short-term price movements. I try to stick with my timeline and how I allocate money. During tumultuous times, some bitcoiners advocate HODLism as a strategy. You should always hold. But I don’t think this is a sound strategy. I think a sound investment approach is to compare Bitcoin with other assets. If I see Bitcoin overvalued compared to real estate or equities, I would consider dumping Bitcoin. This is my personal view of how to deal with Bitcoin’s price movements. You should do your own research.

Bitflate is a cryptocurrency with constant inflation of 7% per year. Its goal is to be a Medium of Exchange.

Exactly my view, that's why I made a post on this forum that Bitcoin is not a get-rich-quick scheme, rather it is an investment for the future.
 Invest in Bitcoin today, and watch it grow to something incredible, it is evident in the journey of bitcoin since the past few years.

[FanFanMan]

BTC is still a highly speculative asset. It is still long way ahead to obtain a status of store of value. Moreover we are likely to go deep again very soon (read this https://newsblockchain.io/news/bitcoin-targets-6-7k-levels-as-the-attempts-to-break-out-10k-failed ) and it also won't bring us any closer to a status of store of value..

[hv_]

BTC is still a highly speculative asset. It is still long way ahead to obtain a status of store of value. Moreover we are likely to go deep again very soon (read this https://newsblockchain.io/news/bitcoin-targets-6-7k-levels-as-the-attempts-to-break-out-10k-failed ) and it also won't bring us any closer to a status of store of value..

Right, and price is always a function of value and speculation

Where is the value?

[shata]

 Bitcoin shows promising technology and I highly recommend any of my collegues to invest in it.

And as to the context of Bitcoin as "store of value", well I could say "nahhh'...

Simply because of the goal, purpose, and used case.

1. Goal - Based on its whitepaper https://bitcoin.org/bitcoin.pdf, the goal is to become a decentralized online monetary system that will interrupt the current financial system. As the result, it becomes "speculative asset" - people seeing it as financial instrument.
This simply explains:

2. Purpose - enabling peer to peer transaction and avoid double-spending. Yes, it was achieved since many or most of the crypto functions the same. So what`s the difference among other cryptos out there, none.

Off course, the unique nature of Bitcoin makes it a lot more better than other alternative cryptocurrency? Bitcoin as having scarce supply now tend to show something investors want - financial haven.

3. Used case - So far, not a thing I would heard about Bitcoin as an instrument to sustain without third parties in the making. You could not used Bitcoin if it has no monetary value in fiat. And never heard of something relevant about BTC, aside from: "it hits the mainstream market with its very volatile price movement" and not because of Covid right?

Conclusion, as BTC may become one of today`s competing financial instrument (store of value or revolutionary alternative to Gold) one thing is sure - without the current financial system, it will be very difficult for Bitcoin to function according to what its whitepaper`s mission and vision. Thus, difficult to be adopted...

It takes working side-by-side with the current system [Government and Bitcoin Community].

PS. [Opinionated]
 

[RajaJudi]

You're saying the truth. Most people who are complaining about Bitcoin are not considering the long term price. They are only looking at the short term movement, and I do understand their reactions are based on when they started investing their money and started experiencing loss. Anyone that invests in cryptocurrency at a rate that is low, and HODL it for a long term, they will be able to make profit.

Right from the beginning, if you check the all time chart, you will notice that the lowest in every year is usually higher than the lowest for the past years just like you have explained, but people are not looking into that.

Many people take Bitcoin as a way to invest, they see Bitcoin like a stock, buy and hold Bitcoin in a short term with their hope of being rich easily in a short time like so many people have done before.
I know that's one-sidedly viewed but think about the outsider, they don't actually know how Bitcoin works, the only thing they know is that Bitcoin is expensive and so many people have been rich because of it. The more people think like that, the idea will spread without needing anyone to talk about it, it will lean deep down into everyone's heart.  

[iv4n]

You're saying the truth. Most people who are complaining about Bitcoin are not considering the long term price. They are only looking at the short term movement, and I do understand their reactions are based on when they started investing their money and started experiencing loss. Anyone that invests in cryptocurrency at a rate that is low, and HODL it for a long term, they will be able to make profit.

Right from the beginning, if you check the all time chart, you will notice that the lowest in every year is usually higher than the lowest for the past years just like you have explained, but people are not looking into that.

Many people take Bitcoin as a way to invest, they see Bitcoin like a stock, buy and hold Bitcoin in a short term with their hope of being rich easily in a short time like so many people have done before.
I know that's one-sidedly viewed but think about the outsider, they don't actually know how Bitcoin works, the only thing they know is that Bitcoin is expensive and so many people have been rich because of it. The more people think like that, the idea will spread without needing anyone to talk about it, it will lean deep down into everyone's heart.  

And why not? Bitcoin is here and each of us can use it differently! It's a beauty of bitcoin, it can be a store of value, if you are investing and holding bitcoin is a store of value for you. What you two talk about here is trading, speculating, and yes btc can be used for that too, it can be used as a mean of exchange, to buy things with bitcoin. Bitcoin is what you want it to be.
Why people have a desire to label everything around, this is for that or that, why not be for more than one thing? And you need to be open-minded about that, today you will use it for holding, tomorrow for trading if you want, changes are a perfectly normal thing, do what you like and what you think it's best for you.

[witcher_sense]

For many, bitcoin is something new and incomprehensible. Until now, many do not know how to use computers. Bitcoin can be even more difficult to understand.
People are afraid to invest their money in something unknown. Well, if it's a bit like they’re used to. For example, structured deposits in a crypto are similar to bank deposits. Only their profitability is different

There are many people in the world who have never used computers, never seen ones, never had enough money to buy it. Some just don't need them. However, one of the advantages of bitcoin is it can be used with a standart cheap cell phone as an application or digital wallet. While many can't afford buying laptops or PC, they can afford mobile devices. For people living in the countries with unstable economic it might be a good way to save money, especially when their currency keeps debasing every day. Bitcoin is risky, volatile, still new asset, but it is not as risky as national currency in some countries.

[coinfinger]

Is it really a store of value? The way I see it, it all depends on whether you’re going long term or short term. For a short term I wouldn’t call it a store for value, you’re just investing and trying make some profit from the fluctuating price of BTC. And when I say long term, I mean at least two years. If you check the price of Bitcoin, every year or two, it will appreciate to a level that is more than what it was before.

You’re only going to have some problem if you buy during a bull run when the price is already at its peak. Then you might be waiting for a long time before you recover the loss. Moreover, a store of value asset should remain with least possible fluctuations so that people will not lose their networth over the time; I agree bitcoin is bullish on long term but how it will help short term investors.

[dejuan]

If you bought at $20k and sold at $3k, then it is not store of value

If you hold for 3+ years, it is always store of value (thus far)

[hv_]

If you bought at $20k and sold at $3k, then it is not store of value

If you hold for 3+ years, it is always store of value (thus far)

haha, extrapolating such would mean if you got 2-3 children in 10 years - getting big family after 50y ?

 

[Wind_FURY]

I was not here during 2013 - 2014, but I strongly believe that there were trolls, haters, nocoiners, altcoiners who laughed at HODLers of that time too.