Yet another article: Is Bitcoin an Asset a Commodity or a Currency?

[DougM]

A recent article with some good current pro/con arguments that is worth a full read IMHO because I am only including selective quotes below.

As a proud HODLer of a modest amount of BTC I currently consider it primarily as an asset/investment due to its lack of widespread adoption as a form of currency and its high degree of volatility (which I like as a HOLDer!) that makes it challenging when using in 'currency mode' as the author points out.  I can also can see it as a commodity like (digital) gold, but I am not sure that 'asset' and 'commodity' are necessarily mutually exclusive anyway. Thoughts?

Some past focused discussions for historical reference I could find (of course many other threads touched on one aspect or another)

Classifying Bitcoin As a Financial Asset August 16, 2015 (small)
  Bitcoin is an asset or currency. October 17, 2017 (huge!)
  Is bitcoin an asset or a currency? October 25, 2017 (Large)

Is Bitcoin an Asset a Commodity or a Currency? By Matt Hussey

As the price of Bitcoin continues to balloon, we look back at how the cryptocurrency is viewed and whether that definition needs to be re-assessed.

https://decrypt.co/47566/is-bitcoin-an-asset-a-commodity-or-a-currency

Bitcoin as a currency?
Bitcoin can be used to buy a whole load of things. From holidays, artwork, food, cars, property and more.

One of Bitcoin’s earliest proofs-of-concept came when Laszlo Hanyecc agreed to pay 10,000 Bitcoin in exchange for two Papa John's pizzas...But the trend appears to be that Bitcoin is moving away from it’s role as a currency. Bitcoin’s trading volume has been declining since 2018

On top of that, the number of Bitcoin addresses holding more than 0.1 coins, (currently about $1,188) is at an all-time high, and the number of addresses holding more than 100 coins (currently $1,188 million) has reached a six-month high, according to Glassnode.

Lastly, but not leastly, for a currency to be viable, it needs to have low volatility. If a currency moves a lot then it makes it difficult to value goods and services appropriately. ..Most major currencies have an annual volatility rate of between 0.5% and 1% every 30-60 days.  At the time of writing, it’s down to 2.25% over the last 60 days. But it’s still a long way from the US Dollar in terms of stability.

Bitcoin as an investment?
On the Bitcoin believers side, you have companies like MicroStrategy and Square, who have been betting big on Bitcoin as an investment. Their thinking for Bitcoin’s potential as an asset is two-fold. The first is about its position as a money supply that’s beyond the quantitative easing currently employed by some of the world’s largest economies.  The second is in its ability to be an on-ramp for huge swathes of the world not currently reached by financial services.

When currencies go into freefall, governments tend to restrict citizens' access to foreign currency to prevent further devaluation. On top of that, banks see getting involved in banking citizens of these volatile currencies as too risky, keeping them out of those markets. Bitcoin however, has so such issues. Anyone with an internet connection and a USB stick can invest, making it a perfect investment vehicle for a third of the world's population-and as such a great investment to buy into now for when that happens.

The global pot of cash currently sat in pension funds, around $3.6 trillion, wouldn’t invest or speculate on the performance of a currency. 
The reason? It’s an asset with zero yield: i.e. the holding of the asset doesn’t produce additional profits beyond the rise and fall of the underlying asset.

Bitcoin as a commodity?
Commodities, as a reminder, are a basic good that is interchangeable with other goods of the same type. In recent years, more financial products have been added to the commodity list, one of which is Bitcoin. Commodities traditionally have higher price volatility than assets like property, or money supplies like currency, making them a fertile environment for speculators trying to predict the rise and fall of an asset and betting accordingly.

Bitcoin as a commodity seems to work on two different investment horizons. Short term, daily volatility, and longer-term speculation. Sidenote: AAX provides bi-weekly Intelligence Reports that analyzes the price of Bitcoin using technical indicators for those keen to jump into day trading.
Long-term, Bitcoin's Stock to Flow model highlights that the cryptocurrency is likely to continue to grow steadily over the longterm.

[TGD]

Yest another discussion for this topic which we all know that will never ends unless the thread will be locked. You should limit on creating thread like this one to avoid spam and repetitive thoughts from previous discussion. If your intention is to only emphasize the thought of your content then you should lock your thread as soon as you create it.

I'm not against knowledge and opinion sharing but this kind of debate will never end just like chicken and egg discussion. Bitcoin will can be categorize as Asset, Commodity and currency because they all share the use of bitcoin.

[Jawhead999]

It's supposed to be a currency rather than a commodity since it's a digital currency not an investment. Whenever I agree some people would think Bitcoin is a good long term investment because of high ROI (>9000), but there's also many people are in loss since they're buy on ATH or not HOLDing.

If Bitcoin is considered as digital currency and can be used to pay anything trough merchant without fear about the legality, Bitcoin will be in bullish and anyone will use it.

[Charles-Tim]

Bitcoin is a currency, a money, a commodity, and an asset, but it is totally and basically digital in its entirety. Money because it has instrinsic value, currency because it can be spent, commodity because it can be exchanged with other commodities and can be bought with the use of fiats or other money, it is an asset because bitcoin is a deflatuonary currency, its value do appreciate over long period of time, although seemed shorter for bitcoin. But, do not let us still leave the main fact, bitcoin operates digitally, it is actually a digital currency.

[Casdinyard]

As answered by users in this forum about this concern, Bitcoin can be both depending on how an individual use it. It's market value is volatile and people made use of this characteristic in order to generate profit which pushes it to fall under commodities. But if in the first place its price is stable, do you think it will still be? The answer is obvious. Bitcoin is originally a digital currency, but since its usage to many countries or places is still limited and is not yet having that much support, those people wherein it is allowed to be used as mode of payment, are the ones who can consider it as a currency. Another question is, if all people are in places wherein it is allowed to be used as means of payment, and if it is having advantages over fiat, why won't it be used as a currency?

[mk4]

You know what? It doesn't matter. Just use bitcoin for whatever reason you wish, because that's one of the main points of bitcoin anyway— financial sovereignty and having total control over your money.

[XCANA]

Bitcoin is a digital currency and not like fiats currency but many tend to see it from the perspective of fiat currency, that's wrong. We have seen vendors in this industry accepting Bitcoin as a currency which later act as a commodity and sometimes as asset to these vendors(the aforementioned are choices from vendors). Bitcoin is asset, a commodity and a digital currency IMHO.

[ropyu1978]

I think bitcoin have both function between as commodity or a currency transaction depend which one you want to use, if you are an investor I think bitcoin function for you as commodity and you will get profit from holding and investing with bitcoin, but when you are a businessman and have many company around the world you will use bitcoin as currency transaction to make your business running well when payment using bitcoin could be faster than fiat as transaction, you will use bitcoin as currency but you can get function with commodity if you wanna hold your bitcoin few moment when price is up for selling.

[CODE200]

You know what? It doesn't matter. Just use bitcoin for whatever reason you wish, because that's one of the main points of bitcoin anyway— financial sovereignty and having total control over your money.

On point. There's really no need to argue. A person is allowed to use Bitcoin as he would want to whether as an investment, mode of payment and such. The answers would be biased because those people who are living in places wherein cryptos are widely accepted, will ofcourse go for the fact that it is a digital currency. But for those who are into investments, they would more likely say that it is more advantageous to use it as an investment or asset in order to come up with profit.

[wxa7115]

Bitcoin is a currency, a money, a commodity, and an asset, but it is totally and basically digital in its entirety. Money because it has instrinsic value, currency because it can be spent, commodity because it can be exchanged with other commodities and can be bought with the use of fiats or other money, it is an asset because bitcoin is a deflatuonary currency, its value do appreciate over long period of time, although seemed shorter for bitcoin. But, do not let us still leave the main fact, bitcoin operates digitally, it is actually a digital currency.

Is bitcoin an asset? Since an asset is basically anything that can be considered valuable then the answer is yes.

Is bitcoin a commodity? Since a commodity needs to be standardized then we need to ask ourselves, can we trade 1 BTC for 1 BTC? Since the answer is yes then bitcoin is a commodity.

Is bitcoin a currency? No!

Is bitcoin money? Yes, the main difference between a currency and money is that money is a store of value while a currency is not, and while bitcoin as a short term store of value is not the best, over the long term it has proved it can perform that function.

[Haunebu]

Isn't it obvious? BTC and other cryptocurrencies are primarily viewed as assets or commodities rather than currencies since they aren't very appealing to majority of the population as currencies due to the TX fees, times etc.

They are viewed as assets or commodities positively due to the financial prospects involved. The other factors include anonymous transactions etc.

[Charles-Tim]

Is bitcoin a currency? No!

I get the point, I know bitcoin is not a currency, but it is regarded as digital currency. Normally, a currency has no intrinsic value, it is just a representation of what we spend physically, a good example of currency is the paper fiat we do spend. But, even if we do not regard bitcoin as currency, it can still be regraded as digital currency or cryptocurrency. I get your point, you are totally right.

[mangsitin]

I think bitcoin have both function between as commodity or a currency transaction depend which one you want to use, if you are an investor I think bitcoin function for you as commodity and you will get profit from holding and investing with bitcoin, but when you are a businessman and have many company around the world you will use bitcoin as currency transaction to make your business running well when payment using bitcoin could be faster than fiat as transaction, you will use bitcoin as currency but you can get function with commodity if you wanna hold your bitcoin few moment when price is up for selling.

in my country, it has determined that crypto is a commodity and not a means of payment, so crypto companies and players can have a clear legal standing.  The government of my country also emphasizes that the value of Bitcoin trading is also very volatile, making it vulnerable to the risk of bubbles.  The currency is also prone to be used as a means of money laundering and terrorism financing.

[Lorence.xD]

Is bitcoin a currency? No!

I get the point, I know bitcoin is not a currency, but it is regarded as digital currency. Normally, a currency has no intrinsic value, it is just a representation of what we spend physically, a good example of currency is the paper fiat we do spend. But, even if we do not regard bitcoin as currency, it can still be regraded as digital currency or cryptocurrency. I get your point, you are totally right.

For me, bitcoin is in a gray area, yes it is a currency but since there is no widespread adoption it does not qualify but it fits the definition. It is asset in a way when it is put in a cold wallet because there is an object involved. In my opinion, it is farthest from commodity though.

[Hallmader]

For the nth time we will again discuss and debate on whether Bitcoin is an asset or a currency. It is as if we can only be allowed to choose either one of the two. Why don't we just accept the fact that Bitcoin could be treated as an asset and as a currency. You could buy Bitcoin as a form of investment but you could also buy Bitcoin and then spend it as a currency.

[Yamust]

You may consider bitcoin as both investment, currency or commodity because it has characteristics of all of them, it will just depend on how you will use bitcoin, so there's no need to ask how you will consider it.

[CryptopreneurBrainboss]

I believe one of the main focus point of the bitcoin vision and blockchain technology was to give power to our finances back to that masses instead of the elite few in persons of banks and government. With that said, I don't need any one or so called experts to tell me what the bitcoins I holds are, as it can be used for whatever I want it to be used for and that's what makes it unique. Personally I see bitcoin as more of a currency and would had loved if that opportunities to spend them for mine day to day transact are made possible in my region.

Bitcoin is yet to conquer it been a currency and it seems that feature is been forgotting as everyone is focusing on how to profit from the industry instead of creating utilities for the bitcoin cuurency. If I'm not mistaken bitcoin was initially made for transaction purpose and not investment.

Now when alternative projects pop up to try and give what bitcoin has left behind (that's them working on becoming a cuurency) they get attacked. The industry is just lacking focused and getting all money motivated.

[hatshepsut93]

Isn't it obvious? BTC and other cryptocurrencies are primarily viewed as assets or commodities rather than currencies since they aren't very appealing to majority of the population as currencies due to the TX fees, times etc.

They are viewed as assets or commodities positively due to the financial prospects involved. The other factors include anonymous transactions etc.

The fact that many people view Bitcoin as an asset doesn't make the point of view of those who view it as an a currency, because it's all just relative, and it's especially pointless to argue about it, because Bitcoin is decentralized, and the protocol itself doesn't care how it's classified. Bitcoin is a currency, an investment, a commodity, a collectible, a speculative bubble, a reserve asset, digital gold - whatever you want it to be.

[Ucy]

Bitcoin is a currency, a money, a commodity, and an asset, but it is totally and basically digital in its entirety. Money because it has instrinsic value, currency because it can be spent, commodity because it can be exchanged with other commodities and can be bought with the use of fiats or other money, it is an asset because bitcoin is a deflatuonary currency, its value do appreciate over long period of time, although seemed shorter for bitcoin. But, do not let us still leave the main fact, bitcoin operates digitally, it is actually a digital currency.

I think It still can be used like physical currency if users want it so... And this doesn't violate its definition as "A Peer-to- Peer Electronic Cash System" because users will still need to somehow verify a physical/printed bitcoin electronically.

In regards to whether it is currency, asset or commodity, people could go through the whitepaper and other places to know what it actually is or what the inventor/developers called it in its early stage of development. It can still be called the other two (assets and commodity) if it fits into their definitions.