Is Bitcoin the best reserve asset?

[Coyster]

MicroStrategy, Grayscale, square etc, it was a year when companies chose Bitcoin as their reserve asset, if you missed some of the big news, see Fillippone's thread Bitcoin treasuries to keep track of it. That being said I found a good article that seemed to suggest that Bitcoin is the best reserve asset we've got, mind you that I'm not agreeing 100% with the writer, but many of his claims seems to be true, so why not allow the community have their say on this, see this excerpt:

An excellent way to evaluate any investment is to take $100 million and move it forward a hundred years and ask the question what happens. If I had $100 million worth of currency in any of the largest cities of the world in the year 1900, and I went forward for 100 years, and I put the money into the best bank in the city, I have two types of risks; counterparty risks and inflation risk. Regarding counterparty risk, every major bank in every major city around the world failed in 100 years. And that is a 90% probability you lose everything

I personally consider this excerpt the best part of the article and something we all can apply as we make investment plans for the future, but that's Bitcoin v Fiat/traditional institutions on the subject, and I agree that fiat is vulnerable to inflation/devaluation and manipulation and Bitcoin is prolly a much better reserve asset than just leaving your funds lying in your bank account losing its value with every year. Since Bitcoin is a good hedge, it's the better option imo. But what about Bitcoin v Gold or Bitcoin v real estate investment etc, the article has something to say about that, see:

Even gold and other precious metals run into issues when you look at them in terms of 100 years. While they appreciate over time, the logistics of holding them can be stressful. You could use third-party storage services such as commercial banks, but history has taught us that gold can get lost even there, especially during wartime or political upheavals such as revolutions. This has also happened several times in the last century. During World War II, large masses of gold were stolen by both state and non-state actors. Similarly, during the Soviet revolution, a lot of privately owned gold was seized by the incoming government

Do you think Bitcoin is the best reserve asset we have atm? Much better than Gold and others, and can we continually trust Bitcoins value to keep appreciating with the years.

The article: https://cointelegraph.com/news/bitcoin-is-the-best-treasury-reserve-asset-humanity-s-ever-had (it's much better you read the article first before commenting)

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[jackg]

Nevertheless, the potential demand is still huge. As mentioned in a recent report by Fidelity, the alternative investment market grew to $13.4 trillion by the end of 2018, and very little of it was in Bitcoin. It might take converting as little as 5% of that to see the Bitcoin price moon.

I'm a bit surprised they went with that as less than 1% of those funds on their own would make bitcoin double in market cap (assuming 1/2 of current holders keep holding).


The most volatile part of cryptocurrency remains the miners though. If a large amount of mining power is controlled in China and is suddenly given a possession order by the Chinese government then the network would at least have to temporarily adjust to blacklisting those miners..

Other than that, it's possible to carry enough to sign a transaction in your own memory or on a discreet piece if paper hidden somewhere.

[Silberman]

Obviously I trust in bitcoin however we cannot minimize the risks we are incurring by holding bitcoin, lets take some of the questions you ask as an example, will bitcoin still exist 100 years in the future? I think the answer to that is yes, but will it retain its value or even increase it after 100 years? This is something I do not know, what if during the next decades a new coin that is many times better than bitcoin appears and that is the coin that gets widely adopted by the world and not bitcoin?

And just as gold can be lost bitcoin can be lost just as easily, there are many horror stories about lost and broken hard drives, people that lost the piece of paper were they wrote their seed words or their paper wallets, all in all bitcoin is a great way to store your money but it is still subject to many of the same issues.

[blockman]

Someone who's going to answer it will answer depending on his bias. A bitcoin investor will answer it's the best asset, a realtor and real estate investor will say that it's the best asset and the rest with gold and other investment instruments. IMO, it's best to have at least 2-3 of those investments and you should include bitcoin as part of your diversified investments. As for the comparison of bank deposits and bitcoin, clearly, we have the winner between the two. Money in the bank for years will have lesser purchasing value if you just deposit it. But if you put it as an investment, you only gain a very low interest annually. Whilst in bitcoin, despite the risk that you'll take and it's quite high, it's very rewarding.

[teosanru]

MicroStrategy, Grayscale, square etc, it was a year when companies chose Bitcoin as their reserve asset, if you missed some of the big news, see Fillippone's thread Bitcoin treasuries to keep track of it. That being said I found a good article that seemed to suggest that Bitcoin is the best reserve asset we've got, mind you that I'm not agreeing 100% with the writer, but many of his claims seems to be true, so why not allow the community have their say on this, see this excerpt:

An excellent way to evaluate any investment is to take $100 million and move it forward a hundred years and ask the question what happens. If I had $100 million worth of currency in any of the largest cities of the world in the year 1900, and I went forward for 100 years, and I put the money into the best bank in the city, I have two types of risks; counterparty risks and inflation risk. Regarding counterparty risk, every major bank in every major city around the world failed in 100 years. And that is a 90% probability you lose everything

I personally consider this excerpt the best part of the article and something we all can apply as we make investment plans for the future, but that's Bitcoin v Fiat/traditional institutions on the subject, and I agree that fiat is vulnerable to inflation/devaluation and manipulation and Bitcoin is prolly a much better reserve asset than just leaving your funds lying in your bank account losing its value with every year. Since Bitcoin is a good hedge, it's the better option imo. But what about Bitcoin v Gold or Bitcoin v real estate investment etc, the article has something to say about that, see:

Even gold and other precious metals run into issues when you look at them in terms of 100 years. While they appreciate over time, the logistics of holding them can be stressful. You could use third-party storage services such as commercial banks, but history has taught us that gold can get lost even there, especially during wartime or political upheavals such as revolutions. This has also happened several times in the last century. During World War II, large masses of gold were stolen by both state and non-state actors. Similarly, during the Soviet revolution, a lot of privately owned gold was seized by the incoming government

Do you think Bitcoin is the best reserve asset we have atm? Much better than Gold and others, and can we continually trust Bitcoins value to keep appreciating with the years.

The article: https://cointelegraph.com/news/bitcoin-is-the-best-treasury-reserve-asset-humanity-s-ever-had (it's much better you read the article first before commenting)

This is a big question actually. And I think this is what is stopping big companies to dive into Bitcoin. Companies generally look into utilites and cash flows of the asset they are buying and investing. Now when a company decides to buy cryptocurrency it's actually making a pretty ironic choice. Not because cryptocurrencies is a bad asset. But making it as your reserve asset is against the very utility of Bitcoin. If everyone starts using Bitcoin as an asset then it's nothing but just peanuts.
 
For example if there is a metal say "X"(Bitcoin) and it's used in certain process and is the only metal that can be used in the process(transaction) and this is the only use of this metal X.
Now this metal is scarce so a lot of people begin to hoard the complete supply of X. Now as the whole supply has been hoarded. The processors (people doing transactions in BTC) the would either use some other metal than this high value metal or maybe the group of Hoarders will release supply slowly to ensure price remains high. Now this market scenario is completely manipulative so at the end the users will try to find some alternatives.

This is the reason I think most of the companies would refrain from investing in Bitcoin as reserve currency.

[avikz]

It all depends on when you enter the market! I know a lot of corporates recently purchased thousands of bitcoins to keep  as reserve but the risk is also huge! Now for a cash rich company who are onverting 5% - 10% of their cash reserves to bitcoin, are not exposing completely to that risk. The amount is huge but as per percentage, it's manageable!

Right now the price of bitcoin is increasing steadily, but there's no guarantee that it won't go down in coming months. So whatever looks brighter at this moment, may turn dull in future. So it is really subjective to conclude whether bitcoin is the best reserve asset or not!

[ReiMomo]

We can't conclude that bitcoin will be the best nor the absolute reserve asset for like what you mentioned things change differently in time. We can't assume what will bitcoin be in the future as early as now though, bitcoins show good characteristics as an investment. But that will not be a guarantee since countries like China are aiming to create their own centralized digital currency which other countries around that globe are doing the same and as of the moment, they are not considering bitcoin as the best one that can resolve most of the issues we are experiencing in fiat.

Moreover, looking at bitcoin as the best reserve asset can also be true if any country like US will adopt it legally as their own currency.

[The Sceptical Chymist]

An excellent way to evaluate any investment is to take $100 million and move it forward a hundred years and ask the question what happens. If I had $100 million worth of currency in any of the largest cities of the world in the year 1900, and I went forward for 100 years, and I put the money into the best bank in the city, I have two types of risks; counterparty risks and inflation risk. Regarding counterparty risk, every major bank in every major city around the world failed in 100 years. And that is a 90% probability you lose everything

Whah??  Yeah, that's an excellent way to look back 100 years to see what would have been the best investment had you been able to see the future 100 years ago, but we all know that isn't possible.  And it's not possible today. 

Time will tell whether Microstrategy and the other corporations that bought tons of bitcoin were wise in doing so, or foolish.  There's no way to know that right now.  I think it's super-risky on their part to use bitcoin as their reserve currency.  Things might be going very well for bitcoin right now, but if you've been into crypto long enough you'll know how volatile it is--and you'd think that you would want a stable currency in your treasury instead of one that's relatively new and has a history of brutal volatility.

I've got those companies on my watch list in my brokerage account, and it'll be interesting to see how their stock price performs over time.

[wheelz1200]

There is no way bitcoin can be labeled the best reserve asset right now.  Not because I don't believe in bitcoin or crypto but because its still in its early infacy.  It just came about 10 years ago we can be placing as the industry financial standard yet at this point cmon.

[Harlot]

It's important to point out that when they are talking about cash reserves being an investment they are looking for assets that would likely appreciate in the future, if that is what you meant by a reserve asset then I think it is one of the best ones out there. But if you are talking about a reserve asset that will have a stable price then Bitcoin might not fit as a good reserve asset as it is too volatile. Microstrategy here bought Bitcoin as an investment not for their cash reserve to have another stable state, their cash reserve is just extra money lying around where they are hoping for to make more money out of it.

[Coyster]

...We can't assume what will bitcoin be in the future as early as now though, bitcoins show good characteristics as an investment. But that will not be a guarantee since countries like China are aiming to create their own centralized digital currency which other countries around that globe are doing the same and as of the moment, they are not considering bitcoin as the best one that can resolve most of the issues we are experiencing in fiat.

Bitcoin is a dex crypto, CBDC's aren't going to affect it in any way since it's more or less centralized and keeping them as a reserve currency is the same as holding the country's fiat currency that's vulnerable to inflation/devaluation/manipulation. Mind you that we never expected the government to believe in Bitcoin, that's prolly why they are imposing regulations here and there and launching CBDC's, but Bitcoin is free from their third party control, so whether they 'consider' it or not, it's more of the 'people's' coin and it's value looks like it'll keep appreciating down the years.

[CODE200]

Bitcoin is indeed a profitable investment but there's no certainty with its market value.
I believe Bitcoin is a good investment and I doubt it is the best one. Its market value at this moment is unpredictable.
There will be times wherein huge profit will be earned but for a long time hold, I think changes may apply. Mass adoption is coming tlose to reality and once cerntalization become more dominant, it could affect its effectivity as an investment especially if its market value suddenly become stable.

[Danslip]

The scarcity of reserve assets makes it valuable and there are more than 100 years for the last mined BTC. Maybe there will be supercomputers which can decypher the private keys or can be a threat against the blockchain technology. From this perspective, I doubt the governments will likely accept the BTC as a regular payment method let alone accepting it as a reserve currency. Gold, Euro, and CHF as the main reserve financial assets have a strong backup but this can be standard for government in order to exclude the BTC as a reserve currency.

[exstasie]

I've got those companies on my watch list in my brokerage account, and it'll be interesting to see how their stock price performs over time.

I suppose Microstrategy's stock is going to become tightly correlated to BTC, especially now that they're buying more coins, and can probably be expected to reinvest down the road too. Absent a real ETF, it's actually an interesting way for mainstream stock investors (in other words, not those investing in pink sheet stocks or trading futures) to dabble in exposure to BTC.

[sheenshane]

It's important to point out that when they are talking about cash reserves being an investment they are looking for assets that would likely appreciate in the future, if that is what you meant by a reserve asset then I think it is one of the best ones out there. But if you are talking about a reserve asset that will have a stable price then Bitcoin might not fit as a good reserve asset as it is too volatile. Microstrategy here bought Bitcoin as an investment not for their cash reserve to have another stable state, their cash reserve is just extra money lying around where they are hoping for to make more money out of it.

I tend to agree with you.
This is technically speaking, if it is a reserve asset that the value will be sustainable then Bitcoin isn't the correct one for we all know that Bitcoins value changes from time to time and it doesn't guarantee that it can keep its price or value on a higher rate in time.

We can't even assume that Bitcoin will be in circulation in decades or centuries from now which we all hope to be but investing in Bitcoin and keep it for the future you might just end up desperate if one day your investment in Bitcoins will lose all its value and totally no worth anymore, (which is impossible but we can't mere this fact).

[Lorence.xD]

If it is a business then it should be backed by a careful study on how to maintain the reserve from the purchased price. In my opinion, it is not the best reserve asset for a business because of the market volatility that is still plaguing the bitcoin market. Maybe precious metals will do the work as the best reserve asset because it retains value and the prices although not that stable, you know that you can rely on it when it comes the time to sell it.

[mu_enrico]

Yes, Bitcoin is the best if we rely on the previous 10 years of market data. The problem is no one knows what will happen in the next 10 years. The believer will believe the price will keep rising while the skeptics won't be so sure.

MicroStrategy et al. did a risky bet. They will win big if the price movement is still the same (as historical data). For me, I'll bet on Bitcoin directly, not these companies' stocks.

[Chrystora123]

If it is a business then it should be backed by a careful study on how to maintain the reserve from the purchased price. In my opinion, it is not the best reserve asset for a business because of the market volatility that is still plaguing the bitcoin market. Maybe precious metals will do the work as the best reserve asset because it retains value and the prices although not that stable, you know that you can rely on it when it comes the time to sell it.

each investor has a different view of the "best asset" but when it comes to the "best reserve asset" then precious metals are still the top choice (not high risk or prices tend to be stable)..

Yes, Bitcoin is the best if we rely on the previous 10 years of market data. The problem is no one knows what will happen in the next 10 years. The believer will believe the price will keep rising while the skeptics won't be so sure.

MicroStrategy et al. did a risky bet. They will win big if the price movement is still the same (as historical data). For me, I'll bet on Bitcoin directly, not these companies' stocks.

can say I dare to take risks, I prefer Bitcoin to precious metals because its price has skyrocketed in the last 10 years (9000%).  no one will know in the next 10 years what price Bitcoin will be but I believe Bitcoin will be 10x or more than the current price..

[gantez]

There is no way bitcoin can be labeled the best reserve asset right now.  Not because I don't believe in bitcoin or crypto but because its still in its early infacy.  It just came about 10 years ago we can be placing as the industry financial standard yet at this point cmon.

It can't be given that kind of recognition now because as you said , it is still very new. Gold has been there for long and tasted to stand the test of time. Even though I don't think gold is but bitcoin is not generally accepted yet like fiat is.

[YOSHIE]

Do you think Bitcoin is the best reserve asset we have atm?

I quoted a talk from michael_saylor on Twitter and said.

Twitter michael_saylor

MicroStrategy companies place their funds in Bitcoin to protect their assets against fiat currency inflation.

The bottom line: if the purpose of spare Bitcoin assets is stored and invested by the company, the assessment I agree with the OP.


However, on the other hand, if Bitcoin assets are invested as individual assets, there should be a deeper assessment of: Understanding the crypto-asset phenomenon, its risks and measurement issues, many factors must be considered when making decisions and considering Bitcoin assets as personal assets.

The point: if the individual mature "understands" about Bitcoin / crypto to be used as an asset, plural, no problem.

And if only / limited knowledge about crypto consider the risks.

[overttherainbow]

Bitcoin is too unstable to be used as reserve asset

[Mauser]

Bitcoin is too unstable to be used as reserve asset

Prices have been fairly stable in the last years in bitcoins. The volatility isn't higher than in some previous metal markets, prices on commodities are fluctuating too with the general market sentiment. Bitcoins might not be the best reserve asset but it's definitely one. There are even companies now who use bitcoins as reserve asset.

[hatshepsut93]

An excellent way to evaluate any investment is to take $100 million and move it forward a hundred years and ask the question what happens. If I had $100 million worth of currency in any of the largest cities of the world in the year 1900, and I went forward for 100 years, and I put the money into the best bank in the city, I have two types of risks; counterparty risks and inflation risk. Regarding counterparty risk, every major bank in every major city around the world failed in 100 years. And that is a 90% probability you lose everything

How is this an excellent method, if few people even live to 100 years. And it's not true that in 100 years your fiat investment will be worthless, take Nobel prize fund as an example - adjusted for inflation, it still pays as much money as 120 years ago, and all this time it was entirely self-sufficient.

Bitcoin hasn't even existed for 100 years, no one knows if it will exist for that long, saying that it's safer than precious metals and other mainstream investments is just delusional.

[Upgrade00]

Bitcoin is too unstable to be used as reserve asset

This would depend on what metric you're looking at; Bitcoin's supply is the most stable of all the other asset classes which are used as reserve currencies, it is immune to supply shocks and fiscal policies are not implemented to adjust to changes in economics conditions. The protocol of Bitcoin would likely be the same 10 or 50 years from now.

You're are probably analysing volatility in the market price, Bitcoin is highly speculative with regular price fluctuations, but it is a decade old currency with lots of time to adapt and evolve to suit various markets. This volatility does not make it very suitable as a reserve asset now especially if the company is looking for stability; so those companies adopting it now are probably being forward thinking to get ahead of the curve (the value is generally appreciating, so in a couple of years it would likely be higher than it is now when compared with fiat or gold).

Also, you cannot only focus on one quality and use that to qualify an asset. Bitcoin has other unique attributes that makes it stand out and which are useful in a reserve currency.

[Heisenberg_Hunter]

Is bitcoin the best reserve currency/asset globally? Yes; Is Bitcoin an investment? Not really; Right from my involvement in bitcoin back in 2017 I had stayed true to the original vision of satoshi considering bitcoin as a global currency without the intervention of any third parties like banks. Fiat currencies follow inflation pattern where our money doesn't have more purchasing power in the future! A person can buy a comic at the average selling price of 10 cents at the beginning of 1960s but the same comic book sells for around $3 in 20th century. This example is more than enough to prove that fiat currencies has lesser buying power over the time frame i.e they are inflationary and we need to spend more to receive anything in return.

Whereas on the other hand, Bitcoin has more purchasing power i.e they are deflationary and all you need to spend is just handful of satoshis in future to buy a PC itself. This will be favorable to the government and central banks when they try to buy goods/products from other countries using their reserve currency (btc) in future. They can be doing a smart investment choice to buy bitcoin when they are lesser in price and use them whenever necessary over the time period. This doesn't mean that a common citizen should hold their bitcoin like a reserve asset! You should spend as and when you have the need and should be saving the rest.

If a bitcoin isn't spent like a currency what's the purpose of itself over the years? Just to be present as mere numbers in our wallet? Gold or other precious metals are physical items which can be used for multiple purposes other than just investments alone. If Lazlo didn't end up in paying 10k btc back at the start of the decade, what was the purpose of invention of bitcoin? Are developers wasting their time in trying to scale the network in the name of Segwit or other advancements? Is the introduction of lightning network a joke? Why should we process 1 million transactions if no one is willing to spend their bitcoin?

[Leviathan.007]

Using of world 'best' is half wrong when are talking about assets, Depending on yourself and how much risk you can take in your life, bitcoin cab be good choose. But in the other hand, you are looking for a long-term and stable investment, bitcoin can't be good choose for you. Better to not call it best reserve asset for now because bitcoin is still young and have a little market small marketcap comparing to other similar assets. But maybe soon, in just a few years, bitcoin can be the best and life saving reserve asset, All I'm saying is bitcoin is not even is the middle of the road and there is a long way to go for it.

[BTCappu]

I can’t tell for sure. Other things you have mentioned here have stayed more than hundred years, but Bitcoin only have been around for a decade.

So, how sure are we about what’s going to happening in the next hundred years?

That’s why diversification is always very important, if you decide to put your eggs in one basket, you might be disappointed, but when they are stored differently, if one happens to have a problem you’re not going to be regretting it as there would be other means to recover from the loss. So, maybe Bitcoin shouldn’t be our only option.

[Eternad]

Using of world 'best' is half wrong when are talking about assets, Depending on yourself and how much risk you can take in your life, bitcoin cab be good choose. But in the other hand, you are looking for a long-term and stable investment, bitcoin can't be good choose for you. Better to not call it best reserve asset for now because bitcoin is still young and have a little market small marketcap comparing to other similar assets. But maybe soon, in just a few years, bitcoin can be the best and life saving reserve asset, All I'm saying is bitcoin is not even is the middle of the road and there is a long way to go for it.

It may not really considered as reserve asset since there is a need for it to be backed as well to be readily available to consider as asset. But its in fact a good investment or used as a substitute in our fiat in terms of using it in doing payment transactions. The best thing about bitcoin is we will have a chance to take advantage of it as investment at it's early stage since there is still a lot of room for it for adoption,those who have it early can take advantage of future benefits it can give.

[iv4n]

Here Are the Top Public Companies That Have Adopted Bitcoin as a Reserve Asset - source https://news.bitcoin.com/here-are-the-top-public-companies-that-have-adopted-bitcoin-as-a-reserve-asset/

I already wrote about this in some other topics! As you see some big companies are adopting bitcoin as reserve asset! I can only say this is just the beginning, many more will join, and it's the trend for the next few years! It's like now or never, but with bitcoin is a bit different, it's like buy low now or wait and buy for much higher prices! If people are not convicted by now that next year will be amazing for all of us, I don't know what else you need to convice you!

[el kaka22]

From what I understand it is like "We have some investments, we have some expenses and there is this cash laying around somewhere that we are not using right now, it is going to be used eventually when we find something proper to invest into, but until we find a place to spend this, it is going to just idle and stay here" and that is what reserve asset is. It is like a bench player from sports games, maybe it will get in, maybe it won't.

Bitcoin is definitely the BEST on these occasions, if you are not using that money right now, best way to keep it is bitcoin because price always goes up, if you end up profiting while keeping your money unused that is even better for you isn't it? However I think bitcoin could also be investment directly instead of being just a reserve.

[jaresmerel001]

This investment reflects our belief that bitcoin is a reliable store of value and an attractive investment asset with more long term appreciation potential than holding cash, as the worlds most widely adopted cryptocurrency. Bitcoin has emerged as a significant addition to the global financial system since its inception over a decade ago, with characteristics that are useful to both individuals and institutions. Bitcoins has been recognized by MicroStrategy as a legitimate investment asset that can be superior to cash, and has therefore made bitcoin the main holding in its treasury reserve strategy.

[AicecreaME]

I think it really depends on someone’s perspective. For some, the best reserve asset is gold, real estate properties to few, and bitcoin to others. I think there’s no exactly the best reserve asset to mention as it is subjective matter.

Gold’s price increase over time, hence making it a good kind of investment. Like what they say, you can never go wrong in investing with gold, may it be jewelries or gold bars in general. But gold can be stolen away. This is the risk that comes along in investing in gold. In real estate properties, the price vary depending on situations. There are times that the selling price of real estates were downhill because of some reasons such as the area became a bad location because it became calamity prone as time pass by.  Another thing is that some real estates require maintenance. While in bitcoin, it doesn’t differ that much to the two mentioned. Its price varies depending over time as well. The value relies on what season it is. This is a great investment as it can reach its peak price, however risky as well because it might drop anytime too.

The things aforementioned were great investments. The prices of these can increase or decrease as time pass by. There’s no constant thing after all. What i can say to those planning to invest for future use is to diversify. Never put all your eggs in one basket. You can never be so sure what the future holds. It’s better to invest in different assets that you trust and you are confident with, so that when one of it fails, you still have something as a back up.

[Dragonfund]

The rate at which institutional investors stacked up BITCOIN is increasing yearly, it's has been a safe haven compare to traditional assets. At a time, they were against the use of Bitcoin because of volatility but we all seen how volatile Gold and others were during their recovery when Feds Reserve were massively printing dollar bills with zero interest rate without considering inflation.
There is this unique feature that is inherently in bitcoin, its ability to quickly recover no matter the crysis and media hunt for bitcoin, that's why this guys will continue and always see bitcoin as an option for the future.

If Gold price was bitcoin and crash just the way BTC did back in March this year, do you think it would have bounce back to $13k?
Well I can't tell since Fed is ready to inject another $3 trillion stimulus check to economy but that's absolutely nonsense and hyper inflation.

[grabpopcorn536]

Reserve assets should be stable one and I will think about fiat currencies. Bitcoin is more like an investment. Although in the case of large companies buying large amounts of Bitcoin as reserve assets, they also say that they will sell them at a good profit. Obviously, it is an investment rather than a reserve of assets.

[jaysabi]

An excellent way to evaluate any investment is to take $100 million and move it forward a hundred years and ask the question what happens. If I had $100 million worth of currency in any of the largest cities of the world in the year 1900, and I went forward for 100 years, and I put the money into the best bank in the city, I have two types of risks; counterparty risks and inflation risk. Regarding counterparty risk, every major bank in every major city around the world failed in 100 years. And that is a 90% probability you lose everything

100 years is a pretty meaningless time horizon to look at inflation since nobody lives that long.  Even in shorter time frames where you're looking at still a "long time horizon" (perhaps 50 years), people don't hold cash that long.  People with enough excess cash invest it.  People without investable cash are constantly spending the cash they have. In short, nobody suffers the inflation rates touted for the USD.

[StyleForceOne]

Someone who's going to answer it will answer depending on his bias. A bitcoin investor will answer it's the best asset, a realtor and real estate investor will say that it's the best asset and the rest with gold and other investment instruments. IMO, it's best to have at least 2-3 of those investments and you should include bitcoin as part of your diversified investments. As for the comparison of bank deposits and bitcoin, clearly, we have the winner between the two. Money in the bank for years will have lesser purchasing value if you just deposit it. But if you put it as an investment, you only gain a very low interest annually. Whilst in bitcoin, despite the risk that you'll take and it's quite high, it's very rewarding.

This conversation or rather a single thought was here for a long time now:
Bitcoin has more risk than most fiat-based stocks or precious metals, but has more profit potential period.

[slapper]

Bitcoin is too unstable to be used as reserve asset

Prices have been fairly stable in the last years in bitcoins. The volatility isn't higher than in some previous metal markets, prices on commodities are fluctuating too with the general market sentiment. Bitcoins might not be the best reserve asset but it's definitely one. There are even companies now who use bitcoins as reserve asset.

No, that is not enough for bitcoin to become a reserve asset. It needs to be stable in a large amount of time. Look at how bitcoin performed in March and April, the price was reduced to one third and suddenly it was pumped up to $9000. And right now, the price of bitcoin is $14000. We are nearly reaching our previous peak and that is a good sign for bitcoin. But becoming a reserve asset is way too beyond its purpose and it might take several years for bitcoin to be adopted regularly. As you can see, there are many people who do not like bitcoin and without their support, it is hard for bitcoin to make a dramatic impact on our economy. And companies which consider bitcoins as reserve asset does not strong enough to have their own speech

Don't expect in bitcoin too much. One day it might be replaced by another digital asset which is stronger, better, and safer. Just try to accumulate bitcoin and sell it at a good price and always remember to support the blockchain technology with your own heart

[davinchi]

I can't believe it has come to this level for bitcoin but it is definitely the best reserve asset right now. I can't believe it because I have been here for a very long time and I have seen bitcoin from disregarded and I have seen it become reserve asset for a lot of companies for hundreds of millions of dollars. Literally from paying 10k bitcoins for a pizza to paying hundreds of millions for 30k to keep a huge companies cash reserves in bitcoin, that type of change was not something I would have even dared to imagine.

The companies who bought bitcoin in bulk at 10k have already made 40% this year and it has been like just 6 months since they told us they did this, if they bought even under that price they may have profited 50%+ and that is insane to think about how much of a profit for a regular company that must be.

[worle1bm]

The crypto adoption has becoming quite a interesting topic for everyone and many countries as well as institutions are making rules and regulations to adapt cryptocurrencies in their fiscal systems.But most of the companies like MicroStrategy, Square Inc has invested in Bitcoin and keep them as reserve assest which is good thing but only with the prospective as investment opportunity that will yeild them profits in future when the price rises but there is risk of volatility in this types of reserves due to price fluctuations as they are not backed by stable coin in the market.Moreover many people think btc and other alts as store of value like gold but it was built by Sathoshi with a different perspective of coin that will change the traditional methods of payments with decentralised digital revolution for the world which has many other functionalities in the market. MicroStrategy has gained over 40% of profit after it has invested in Bitcoin with over 39148 bitcoin in their reserves with increase in prices as per the reports as prices plunged over $14 this week.So weed need to understand the basic use of this coin and when we will use it in proper way the prices will automatically increase with increased demand and limited supply of 21 million and you can gain profits on them.

[lixer]

Why are you comparing Bitcoin with assets that has been around for hundred years?
If you said for a decade I would have said better, because for the last decade now Bitcoin has been increasing  and as time goes on it keeps getting bigger and bigger and if you have been the holding the asset for long now you possibly must have gotten something from it.

But, you telling me to take and move it forward a hundred years, seriously? If I am to make that kind of calculation with Bitcoin , which hundred years am I moving to? Bitcoin, but the point you’re making here is what I don’t get.

[shield132]

Bitcoin can be considered as the best reserve asset but the most dangerous at the same time. Personally, I think it's better to convert your assets in bitcoin when you are highly confident that you won't touch them for a certain time and in case something happens, you have another plan to follow in case bitcoin's price falls dramatically.
Otherwise, if everything happens positively, then it can radically change the fate of the company. Reserve, that you weren't using of course, can increase significantly in USD value (USD because finally we convert bitcoins into USD and it's the most widely used currency).
Imagine: Got 100K USD in reserves, price went up to 10x (why not?), got 1 Million USD. With that 1 million, you can skyrocket your business, it's like an unexpected rush of money, donation.

[shoreno]

Bitcoin can be considered as the best reserve asset but the most dangerous at the same time.

it cant be the best if theres dangers in it . i could say that bitcoin is better while gold can be nearly the best because the volatility and the price is just right .

Personally, I think it's better to convert your assets in bitcoin when you are highly confident that you won't touch them for a certain time

disregarding the risk . btc can help us avoid spending our money when we already convert them digitally  but if we include the risk , we can loose the money that we expected to save for a long time . idk if theres a legit digital gold investment that can work just like btc but i heard there are projects before that are back by gold . maybe they are stable too and at the same time still profitable

[Shasha80]

Investment is not only a source of income, but is a long-term turnaround of money. Ten years ago, gold was one of people’s investment options,
but now with technological advances, Bitcoin is the choice to invest.
Although bitcoin is considered a fairly speculative asset compared to gold. But we know the advantages of bitcoin behind it have advanced technology that is blockchain that outperforms gold as a long-term investment asset.
This proved that Bitcoin was mass adopted by the world community, so more and more people know and use Bitcoin.
Regardless, we can only speculate on bitcoin or cryptocurrency, nothing is certain, we will never know whether bitcoin will become extinct in the future.

[charlesmichel1]

Cryptocurrencies and precious metals are completely different to be compared to. It's hard to say that Bitcoin can serve as a better reserve currency than gold.

[Alucard1]

I also prefer bitcoin or any cryptocurrency compared to fiat currency, there is a high possibility that I could earn grom cryptocurrency compared to fiat, even though we cannot remove the concept of risk in cryptocurrency because of the volatility of it, but that feature makes the cryptocurrency uniques and better than fiat currency for me because it is really good for a long term investment and we could earn little by little as we know the rules of "buy low and sell high".

[Kong Hey Pakboy]

I also prefer bitcoin or any cryptocurrency compared to fiat currency, there is a high possibility that I could earn grom cryptocurrency compared to fiat, even though we cannot remove the concept of risk in cryptocurrency because of the volatility of it, but that feature makes the cryptocurrency uniques and better than fiat currency for me because it is really good for a long term investment and we could earn little by little as we know the rules of "buy low and sell high".

We all agree that we prefer bitcoin or cryptocurrency compared to a fiat currency. Here we could gain considerable profit by just buying or investing our money in it; that is why bitcoin is suitable for long-term investment and as a reserve asset rather than other investments such as gold and oil. The only problem we face in having bitcoin and other cryptocurrencies as an asset is its volatility that it is hard to say when it will increase or decrease.

[rodskee]

Cryptocurrencies and precious metals are completely different to be compared to. It's hard to say that Bitcoin can serve as a better reserve currency than gold.

Yet Bitcoin is still an asset that we can hold still for long years?but yeah it is not comparable to Physical things specially metals because those are the most needed for developing countries while Bitcoin remains as online payments.
But better to have both Gold and Bitcoin so in case there  comes bad  in one at least another is our next option to use.
But i'm sure gold will always remain a best asset in practicality.

[goaldigger]

I also prefer bitcoin or any cryptocurrency compared to fiat currency, there is a high possibility that I could earn grom cryptocurrency compared to fiat, even though we cannot remove the concept of risk in cryptocurrency because of the volatility of it, but that feature makes the cryptocurrency uniques and better than fiat currency for me because it is really good for a long term investment and we could earn little by little as we know the rules of "buy low and sell high".

Bitcoin proves to us as one of the best asset that you can consider to hold aside from gold and of course Bitcoin is better simply because its decentralized and we have the freedom to use Bitcoin without the approval of the banks or even the government. I cannot totally say that bitcoin is the best asset because we all have different risk level of tolerance, and the volatility is very high that no one can guarantee that Bitcoin is the best.

[Sterbens]

Obviously I trust in bitcoin however we cannot minimize the risks we are incurring by holding bitcoin, lets take some of the questions you ask as an example, will bitcoin still exist 100 years in the future? I think the answer to that is yes, but will it retain its value or even increase it after 100 years? This is something I do not know, what if during the next decades a new coin that is many times better than bitcoin appears and that is the coin that gets widely adopted by the world and not bitcoin?

And just as gold can be lost bitcoin can be lost just as easily, there are many horror stories about lost and broken hard drives, people that lost the piece of paper were they wrote their seed words or their paper wallets, all in all bitcoin is a great way to store your money but it is still subject to many of the same issues.

I think if you buy now, the answer is definitely no. unless you have unlimited money, you can buy it and keep it until any time. and that won't guarantee anything.
Apart from bitcoin, maybe in my opinion gold can be used as a good reserve asset, because the supply of gold in the world is decreasing day by day. The point is back again to the calculation in terms of managing assets owned. because even if someone owns any amount of bitcoins, it's still useless if you don't know what to do with it.
   so not only armed with capital and intention, but knowledge in managing assets must also be improved. small examples in the family are the same. and not much different.

[Dorodha]

Bitcoin is better than gold in every respect Bitcoin is the strongest form of money and the best reserve asset and the best securities asset seen before. the demand for Bitcoin has doubled from gold at present offshore banking, company formation, asset protection and related bitcoin best ICO country Cryptocurrency Bank Circle will be fully supported by the Federal Reserve of the United States Bitcoin is operating all over the world and will be known as the gold digital currency. The risk will be less and it will be easier to spend.

[manfredmann]

not really to me in my own opinion  because asset like real.estate property are way better than bitcoin. Bitcoin is good no doubt about it but its value is highly volatile so meaning whenever you need the then you need to wait foe the right time to withdraw not getting losses. Though same process will be in real estate that you still need to wait when you want money by selling it. But the price of the property never depreciates and there are better ways that property could be sold like use of finacing services.

[Silberman]

Bitcoin is too unstable to be used as reserve asset

And yet there are people, companies and even countries, like in the case of Venezuela, that are doing exactly that, the truth is that no one really knows what it is going to happen, it is obvious we trust that bitcoin is going to be fine and do great during the next decades but that is still a belief and not a fact, so it is possible that all of those that are using bitcoin as a reserve asset are being foolish but it is also possible they are the ones that are correct and everyone else is wrong, after all it will not be the first time a minority of people were correct while the majority was completely wrong about a subject in particular.

[drlukacs]

MicroStrategy, Grayscale, square etc, it was a year when companies chose Bitcoin as their reserve asset, if you missed some of the big news, see Fillippone's thread

Do you think Bitcoin is the best reserve asset we have atm? Much better than Gold and others, and can we continually trust Bitcoins value to keep appreciating with the years.

The article: https://cointelegraph.com/news/bitcoin-is-the-best-treasury-reserve-asset-humanity-s-ever-had (it's much better you read the article first before commenting)

Yes, I have been a fan of crypto for a long time and today I really see that financial hedge funds need Bitcoin to avoid inflation.
So the predictions about the far future of Bitcoin are coming true and the world will soon use blockchain technology as well as cryptocurrency to solve economic problems.
Hopefully MicroStrategy, Grayscale, ... will bring a more positive perspective to everyone in the world about Bitcoin and crypto in the future.

[justdimin]

Personally, I think it's better to convert your assets in bitcoin when you are highly confident that you won't touch them for a certain time

disregarding the risk . btc can help us avoid spending our money when we already convert them digitally  but if we include the risk , we can loose the money that we expected to save for a long time . idk if theres a legit digital gold investment that can work just like btc but i heard there are projects before that are back by gold . maybe they are stable too and at the same time still profitable

Gold is not seen as a "reserve" asset but more like an investment in itself, bitcoin could be seen as an investment as well with the same logic but there are slight stuff that could make the difference between the two. For example when you have a huge gold reserve instead of fiat, it takes longer time to process and exchange it back to fiat, but when you have bitcoin as reserve asset you could exchange it to fiat in a matter of few hours at most which allows these huge hundreds of millions of dollars worth companies to be a lot more nimble and quick with their trades.

This is why the nature of bitcoin allows it to be an investment but also allows it to be something we can cash out and get out very quickly if we want to that makes it the best reserve asset out there.

[Fortify]

I think any sensible investor would have a range of assets and not just limit themselves to one. I'd feel much more comfortable sleeping at night if my portfolio of assets covered property, stocks, precious metals and cryptocurrency. They can also do a variety of different jobs: You can live in property without having to pay someone elses mortgage and you can get a dividend income from owning stocks (that doesn't require selling them in order to "cash out" when you need fiat currency). Some people do get through life having all their money concentrated in one asset, but there's a reason the phrase "Don't hold all your eggs in one basket" exists.

[FlightyPouch]

Reserve assets should be stable one and I will think about fiat currencies. Bitcoin is more like an investment. Although in the case of large companies buying large amounts of Bitcoin as reserve assets, they also say that they will sell them at a good profit. Obviously, it is an investment rather than a reserve of assets.

It is true that bitcoin is volatile but its value grows in a period of time and if that would be the case, I think there are a lot of other countries that would follow that and do the same putting bitcoin as a reserve asset making the value of bitcoin higher. Gold is a reserve asset too but if you will be looking at it, is not that stable too.