Why Bitcoin doesn't work well as a store of value.

[headingnorth]

Do you agree or disagree? I myself used to believe bitcoin was the greatest store of value ever created,
but after giving it a lot of thought I no longer believe that is the case, and here is why.


1. People often say bitcoin is a store of value, but in the same breath also tell you it is highly volatile.
Those are two contradictory things. A store of value has to be more or less stable in price. It cannot be both
highly volatile and a good store of value imo.

When something is very volatile, it tends to shake people out and cause them to panic and sell.
That is why most people will not be able to HODL bitcoin for long. Of course there are some hardcore HODLers
who are able to hold it for many years (I was one of them) but they are the exception not the rule.

HODLing and "never sell your bitcoins" are nice slogans but in reality it is easier said than done for most.

2. Bitcoin doesn't have a stable source of demand.

By that I mean there is little to no demand for bitcoin beyond speculation. For example, Apple has a strong stable source of
(non-speculative) demand because billions of people in the world are buying iPhones and Mac computers every day.
Only 10 to 20% of demand comes from people speculating on Apple stock while 80 to 90% is from commercial product sales.
That contributes to the price stability for Apple. Same thing for gold. The primary source of demand for gold is the commercial
market for jewelry and other products. Unlike bitcoin gold doesn't rely on the speculation market nearly as much and is
what helps makes gold such a good store of value.

3. It is easy to HODL it when prices were low.

In the early days of bitcoin there were many bitcoin OGs who bought it very cheaply. You can buy one bitcoin for a few dollars,
or even a hundred bitcoins for very little. Of course, it is easy for you to HODL it for many years even during extreme volatility,
because it cost you almost nothing. Even if the price goes to zero you aren't losing much.

But it is not so easy to HODL for those who bought in later when prices are much higher, because you now have a lot more to lose.
When the volatility hits you are more likely to hit the sell button. That is why the path from zero to $100K is a lot easier.

But the path from $100K to $200K will probably be much tougher and longer IMO, assuming it will get that high.


4. Bitcoin is too correlated to risk assets and the economy.

When the economy tanks so do risk assets such as bitcoin. Which shows that people do not generally view bitcoin as a flight to safety
or a good store of value when times are bad. To the contrary it is one of the first things that gets dumped. Again, this is tied
to the fact that bitcoin has no strong or stable source of demand outside of speculation. Without it bitcoin may be forever
destined and limited to the niche market.

[BIT-BENDER]

1. People often say bitcoin is a store of value, but in the same breath also tell you it is highly volatile.
Those are two contradictory things. A store of value has to be more or less stable in price. It cannot be both
highly volatile and a good store of value imo.

Bitcoin is a good store of value based on its impact, history and futuristic importance. Based of impact Bitcoin impact can not be hidden as it has created solid impact across the world, the history of Bitcoin has proven that it is always on the rise and this is a good thing for someone who wants profit, Bitcoin is always going to be very relevant in the future far more than it is right now. I wonder who wants to a commodity as a store of value but thinks that Bitcoin with its history of always going higher is a bad option.

. Bitcoin doesn't have a stable source of demand.

Bitcoin is not a physical commodity so comparing it to Apple that creates devices and Gold that has physical form doesn't make sense, Bitcoin is in demand and the fact that the price has grown astronomically from when it started is a b
Prove, everything must to have physical value, Bitcoin offers more of value that is positively changing the digital financial system.

[FirmWars]

You forget to add that Bitcoin is not for everyone 🤷‍♀️

What do you people that keep saying these things even understand by store of value? Before an asset is called a store of value, it means that the asset is scarce, durable, liquid, can be saved and can be exchanged later one without it losing its purchasing power. Does Bitcoin lack any of those characteristics?

You said Bitcoin is not easy to be hold when the price is low, but if you can not hold Bitcoin when the price is low, you can not also hold other of your assets when the price depreciate. But Bitcoin has a significant time lock feature that allows you to lock your Bitcoin until a specific period of time. You can lock it and set your time till next bull season.

[Somegory]

I will advise people not to invest in what they don't know, it is clearing that you don't really understand the store of value that Bitcoin presents and also the advantage of it's volatility, Gold for example is all good store of value and it is also not stable, yet people would rather have gold than anything else.

What makes Bitcoin a good store of value?

1. Durability.
2. Divisibility.
3. Portability.
4. Scarcity.
5. Decentralisation.



Look at that graph again, that's the price action since Bitcoin was born, tell me how this is not a good store of value? The volatility is even a good thing because it helps bring in new people which in return brings even more scarcity.

Bitcoin is not for people who want to turn rich in a month or two, this is why Bitcoin should be considered an investment l, it is not for people who believes that holding is not easy, investment doesn't suits such people.

They are the type that loves what Ponzi schemes have to offers, because it's always about now for Ponzi and tomorrow for Bitcoin, you choose which one suits you best.

[headingnorth]

. Bitcoin doesn't have a stable source of demand.

Bitcoin is not a physical commodity so comparing it to Apple that creates devices and Gold that has physical form doesn't make sense,
Bitcoin is in demand and the fact that the price has grown astronomically from when it started is a b
Prove, everything must to have physical value, Bitcoin offers more of value that is positively changing the digital financial system.

Something doesn't have to be physical to have a strong stable demand.

For example Paypal is not a physical product but is still in high demand as a payments service. Paypal doesn't rely on speculation.
If bitcoin is ever widely adopted as a payment service on the level of Paypal, then one day there could a strong source of demand
for bitcoin beyond speculation, but that could be far in the future if it ever happens.

[nemesis_incarnate]

Everything is correlated to the big events in the world, both BTC, and stocks, and all the rest of the stuff out there.

We will talk about how much BTC will fall once its cap becomes trillions, not just almost two of them

[Alvin_talk]

Something doesn't have to be physical to have a strong stable demand.

For example Paypal is not a physical product but is still in high demand as a payments service. Paypal doesn't rely on speculation.
If bitcoin is ever widely adopted as a payment service on the level of Paypal, then one day there could a strong source of demand
for bitcoin beyond speculation, but that could be far in the future if it ever happens.

Your comparison is entirely wrong, PayPal is more like a custodial payment service and not a currency so you can't compare it to an digital currency that has monetary value. A better comparison will be between PayPal and Bitcoin wallets which serve the same purpose such as sending, receiving, storing of funds. I recommend you do more research before concluding bitcoin is not a store of value.

I will like you to digest the following information, Bitcoin is a store value because:
1. It has a limited supply (capped at 21 million), scarcity = value.
2. It is a decentralised asset with all ledger visible in the transparent block chain unlike the centralised system where a third party decides the fate of our transaction, so people trust bitcoin and trust comes with value.
3.Its historical price performance over the years is a proof of value.

I think you deserve a spot in this my thread: My favourite quotes from Bitcoin critics and their flaws

[She shining]

A store of value doesn't mean they have to be stable at all time but be able to retain purchasing power in the long run just like Gold. Volatility isn't the standard buy long term performance. It's demand isn't only speculative people use it for cross border transactions, hedge against inflation and ability to control one's fund without a third party. Store of value assets can still fall during liquidity crisis like that of 2008 in which gold fell more than 20%

[Donneski]

The conclusion you made here I think is too harsh. You need to understand that Bitcoin is still treated like a risk asset because it’s young not because it can’t store value. Volatility, correlation and speculation are normal for an asset still finding its place.

At the end of the day, people run to Bitcoin not because it’s perfect now but because of what it represents which are long-term, independence and scarcity. With time and broader adoption, its behavior will likely reflect that more clearly.

[Patikno]

1. People often say bitcoin is a store of value, but in the same breath also tell you it is highly volatile.
Those are two contradictory things. A store of value has to be more or less stable in price. It cannot be both
highly volatile and a good store of value imo.

When something is very volatile, it tends to shake people out and cause them to panic and sell.
That is why most people will not be able to HODL bitcoin for long. Of course there are some hardcore HODLers
who are able to hold it for many years (I was one of them) but they are the exception not the rule.

HODLing and "never sell your bitcoins" are nice slogans but in reality it is easier said than done for most.

Bitcoin is not suitable for investors who paper-handed, or who easily panic when Bitcoin drops in value. I think most of them lack a fundamental understanding, and lack of strong belief in their investment. History will repeat itself, and we will see many people saying "Is it too late to buy Bitcoin?". Bitcoin is only suitable for those who understand it, and believe in its potential profits. Many companies, countries, or institutions have invested in Bitcoin for various purposes, including as a store of value, most of them believe in Bitcoin for the long term, which is why we hear more about buying Bitcoin than selling it. So, we can conclude that Bitcoin is not a quick way to make a profit, it takes a long time to achieve it, which is why we often hear the phrase "The Holder is the Winner."

[malekbaba]

Btc,  a great store of value to those who are patient.
BTC has fixed supply. Means no new money printing and no inflation. Even gold supply increases 1 to 2% yearly. This fixed supply and continuous demand will drive the price in new high. Thus btc value is protected. You can control your asset completely. Can move it anywhere you want easily. From last decades BTC remain most profitable trade. It outperforms gold, stock, real estate everything.

[Uruhara]

I think that even though bitcoin is not a perfect store of value or as good as gold, it has advantages that gold does not have. At the very least, bitcoin can be considered a long-term store of value, even though there are risks involved. And we know that everything has its risks. However, some key points that make many of us trust Bitcoin as an asset are due to factors such as:

- Its limited supply
- It operates on a decentralized network (So it will be difficult and even impossible to manipulate by the government because this is very different from the centralized system we know, and I don't need to explain that)
- There is continuous growth in interest and new investors. Even some large companies, or even hundreds of large companies, now use Bitcoin as one of their corporate reserve assets.
- Bitcoin's price history, which has consistently risen over time, gives long-term holders confidence in its value growth. (Bitcoin is more than just a store of value; it is also the most promising long-term investment to date).

However, I also understand anyone who says that Bitcoin is just a high-risk asset that does have good value growth, making it suitable for long-term investment due to its potential for continuous growth, consistently setting new all-time highs (ATH) from period to period.

However, if we want to talk about a proven store of value that can retain its value even when the internet is down, then gold is indeed the perfect store of value.

This is because bitcoin and all other digital assets have a weakness in that they all depend on technology that must be connected to the internet and also requires electricity.

However, since we live in the digital age and we may even see digital assets being used more in the future, choosing bitcoin as a store of value is not wrong at all. But it would be better if we had two things, physical assets and digital assets. Or physical stores of value and digital stores of value. That would minimize risk.

[Rockstarguy]

Bitcoin may not seem to be a store of value to you, but it is, and not everyone is able to hodl Bitcoin. Assets that are stores of value are very volatile, and if you invest for a long time, the amount you invest and what you will gain in the future will definitely increase.

Bitcoin has the potential for an increase in value, so it is a store of value. Different people have their own definitions of what Bitcoin is to them, but for many who consider Bitcoin to be a store of value, it will definitely serve this purpose for them.

[Cookdata]

The conclusion you made here I think is too harsh. You need to understand that Bitcoin is still treated like a risk asset because it’s young not because it can’t store value. Volatility, correlation and speculation are normal for an asset still finding its place.

At the end of the day, people run to Bitcoin not because it’s perfect now but because of what it represents which are long-term, independence and scarcity. With time and broader adoption, its behavior will likely reflect that more clearly.

Bitcoin isn't young, Bitcoin happens to be a different assets that is new to people. There is nobody that is into traditional finance that will deny they haven't hear of Bitcoin, they know it and obviously everyone knows how it work but not everyone has the chest to bear the volatility, it's that feared volatility that brings the profit everyone talks about in every cycle. If you can enjoy the bull run, be ready to accept the FUD that comes during the bear market.

There is another fact we need to address, not everyone will buy Bitcoin. The way we despise Gold and other assets is the same way some people see Bitcoin but you know where Bitcoin wins? A Bitcoin investors can hate traditional assets all their life and will never change their mind about it as maxis or if there is any other word that suit but we have won traditional finances into Bitcoin, the numbers of Bitcoin institutions are buying is enormous and we are not done yet, this is just the beginning.

[uchegod-21]

To clarify your doubt, just try saving the same amount in fiat value and the equivalent in Bitcoin for at least two years. At the end of the stipulated duration, compare the value of your fiat savings and your Bitcoin savings. Despite the fiat stability and Bitcoin volatility, you will see the answers which will convince you that one hedges against inflation better than the other.

[headingnorth]

Btc,  a great store of value to those who are patient.

BTC has fixed supply. Means no new money printing and no inflation. Even gold supply increases 1 to 2% yearly. This fixed supply and continuous demand will drive the price in new high. Thus btc value is protected. You can control your asset completely. Can move it anywhere you want easily. From last decades BTC remain most profitable trade. It outperforms gold, stock, real estate everything.

Anything will outperform the market in its early years. Even memecoins can often wildly outperform when the price
10x's or 100x's in the first few weeks or months of their existence.

But there reaches a point when the marketcap gets very big and begins to experience diminishing returns.
Just because something may have multiplied exponentially during its initial years doesn't mean it can keep doing that forever.

For bitcoin to go from zero to $100K is a lot easier than to go from $100K to ONE MILLION per coin in the same time period.
At one million dollars per coin Bitcoin's marketcap would be greater than all of the MAGNIFICENT 7 companies COMBINED.

That is just not realistic for something that has little to no demand beyond people speculating on it.

[Dogedegen]

Anything will outperform the market in its early years. Even memecoins can often wildly outperform when the price
10x's or 100x's in the first few weeks or months of their existence.

This is an incorrect and false comparison as this does not include liquidity. You can make paper gains with anything. The importance lies on returns in relation to liquidity.

For bitcoin to go from zero to $100K is a lot easier than to go from $100K to ONE MILLION per coin in the same time period.

You got everything wrong. Going from zero to $100k is impossibly harder as it requires a complete validation from the existence of humanity, many different kinds of technological, market and legal tests are needed. People need to get used to what Bitcoin is and accept that they have been wrong with their past beliefs. This was the challenge. Going from $100k to ONE MILLION is pretty easy comparatively speaking. Bitcoin is alive, kicking and never been more validated than it is now.

At one million dollars per coin Bitcoin's marketcap would be greater than all of the MAGNIFICENT 7 companies COMBINED.

Good, that is how it should be. Preferably it should include most asset classes as well as it is better than all of that combined.

That is just not realistic for something that has no demand beyond people speculating on it.

This means you are a malicious person who came here to spread FUD. Bitcoin has unlimited amount of demand cases compared to companies. If you don't understand it that does not mean that there is no demand or utility, it just means that you are stupid. 

Bitcoin isn't young, Bitcoin happens to be a different assets that is new to people. There is nobody that is into traditional finance that will deny they haven't hear of Bitcoin, they know it and obviously everyone knows how it work but not everyone has the chest to bear the volatility, it's that feared volatility that brings the profit everyone talks about in every cycle. If you can enjoy the bull run, be ready to accept the FUD that comes during the bear market.

You are very mistaken because you are basing this on the absolute number of years that something exists, which has nothing to do with whether something is new to people or not. Quantum physics are not a new thing based on the number of years that it exists, and how many people in the world understand it? 0.01%? Bitcoin is a radical innovation that is completely different from anything else in existence, it flips upside down most beliefs and things that people are used to. For many it is something that should not exist, something that should not have value, something that is impossible. Based on this, Bitcoin is extremely new. It stops being new when the average person understands it. Meanwhile they don't even understand fiat, that is still new to them.

[NurseHub]

So because bitcoin or crypto is on decline today as a result of festive withdrawals, it means we now have to disagree that bitcoin is a store of value? maybe in your opinion but in the opinion of large number of people bitcoin is still very much a store of value, firstly store of value is not for one month or two it's for a long period of time, yes bitcoin is volatile but it doesn't change the fact that it's an asset that can retain it's price or double it's currently price in a matter of few years that there is store of value.

[PX-Z]

But it is not so easy to HODL for those who bought in later when prices are much higher, because you now have a lot more to lose.
When the volatility hits you are more likely to hit the sell button. That is why the path from zero to $100K is a lot easier.

That's how the market works on every assets that is available for buy and sell, and its not just about bitcoin.

The price of bitcoin grows so much compare to any assets in the world. And that's how it works very well as a store of value.

Imagine having them on earlier stage, anyone will be millionaire or even billions, and thats how its effective as a store of value

[d5000]

1. People often say bitcoin is a store of value, but in the same breath also tell you it is highly volatile.
Those are two contradictory things.

While I agree a bit with this statement, there are two facts hinting that this "issue" doesn't affect Bitcoin that much:

- The long term trend was always bullish. That is very different from memecoins and shitcoins which only are bullish for one big pump and then lose value constantly (with likely intermittent small pumps which often never reach the original pump's price). And those that were "shaken out", had always the opportunity to re-buy for the same price they sold, and later they made profit if they held only a few weeks or months more
- Volatility is lowering since Bitcoin's incenption practically (see the charts I posted in your other "skeptical" thread).

I'm a bit wondering why you were so overwhelmingly positive about Bitcoin (even "maximalist" sometimes) until the OP_RETURN debate and now are trying to question it. Has it to do something with that debate? It's looking a bit "strange", at least

2. Bitcoin doesn't have a stable source of demand.

Also for this point, what I wrote in your other thread stands:

- Bitcoin has unique qualities as a currency - it's the world's only solution for a safe (in contrast to almost all altcoins!), decentralized, and censorship resistant currency or "value" (you can call it like you want)
- Bitcoin demand can grow once its volatility is low enough to be adequate for saving purposes.

3. It is easy to HODL it when prices were low.

This point is only important if your goal is speculative profit.

4. Bitcoin is too correlated to risk assets and the economy.

I also addressed this in the thread about gold vs. Bitcoin - probably a temporary phenomenon until Wall Street traders understand Bitcoin's fundamentals better.