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

[Proty]

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.
.

bitcoin is a good store value and this has been proven over the years. The fact that bitcoin is highly volatile doesn't mean it is not a good store of value. Bitcoin being volatile in nature is even something that makes it a good store of value because it act as a hedge against inflation. If bitcoin was to be a stable asset definitely inflation will eat it values up as time passes by there by making it not to be a good store of value.
Volatility doesn't mean only downward trend but it comprises both downwards and upwards trend. With this in mind there won't be much fear of selling whenever there is a sudden decline in price.

[Abiky]

What type of investment or asset can easily generate profit?

Bitcoin is just like any other investment. The difference between them is that each type has its own cycle and require specialized knowledge and patience to generate profit. Bitcoin is even considered an investment that offer faster and larger return due to its shorter cycle. That is also why we chose Bitcoin. However, despite its shorter cycle, Bitcoin is not a tool for getting rich quick overnight.

Therefore, those who want to get rich quickly and lack patience should not invest in it.

Stores of value often move at a slow and steady pace. Such is the case with Bitcoin and Gold. Bitcoin moves much slower than altcoins, but as not much as Gold. Often times, high rewards come with a high risk of loss. Especially when returns are obtained within a short time frame.

Most people quickly get disappointed of Bitcoin's short-term performance, and move to altcoins instead. Such decision could lead them to financial ruin if the altcoin of choice goes all the way down the drain in an instant. Better play it safe with low risk/reward coin such as Bitcoin, then worthless "meme" coins. Just my two stats.

[X-ray]

While stores of value are a "long-term concept", today's generation want quick results. So if they see prices going down within the short-term, they will immediately get disappointed and panic sell. Such is the situation with the OP. He's frustrated about Bitcoin's short-term performance, probably out of desperation to make money fast. Both Bitcoin and Gold are a long-term thing, so only invest in it if you're willing to build true generational wealth. For quick returns (although with a higher risk), altcoins are a much better choice.

I'm confident that BTC will continue to rise towards new heights as institutional adoption increases. With "Wall Street", banks, and governments involved in Bitcoin, prices will be a lot higher in the future. Just you wait and see.

You are probably right, and please correct me if Im wrong. Because, if I'm not mistaken, OP used to be a fervent Bitcoin supporter on our forum. But then suddenly he did a complete 180 and started complaining about Bitcoin. So, if it was not for profit, I do not see any other logical reason why he would change his mind so quickly and turn his back on bitcoin

Its only a matter of time before Bitcoin grows and reaches new record high prices. There is nothing to doubt about that, but the problem is that many people will lack patience  .

The bitcoin rally was hell of an adrenaline, everybody is super optimistic especially the newcomers who just bought bitcoin at pretty high price and when things doesn't go in their favor, of course they will feel disappointed.

I've seen many of such cases, from ultra bullish to shitting on bitcoin on bearish market but it doesn't change the fact that bitcoin's price performance has been amazing for this decade.

[Iamgoat]

Bitcoin happens to be a store of value in that it can serve as resistance to arbitrary inflation rate, limited in supply, the Bitcoin movement is bounded by supply and demand, anyone who doesn't consider Bitcoin for the long term will never benefit from it as store of value, it is wrong when people consider volatility as a threat to Bitcoin existence, entering in to Bitcoin with fast expectations is wrong and it shows low understanding, the market is with uncertain performance and it is very hard for it to match anyone's timeline and expectations.

Bitcoin works for long term investors more than it does to the short term investors but even the long term we talk about, it is something which has to be done with a solid strategic plan to execute. You need plans such as predicting the value over a specific period of time until they record a specific amount of money which they had set as target and once they hit the target, you can decide to close such as investment or work towards a bigger investment with bigger targets and longer time.
Imagine how bitcoin fell from a significant amount of over a 100k dollars to what is now 66,000 dollars or thereabout. Such significant fall has discouraged alot of people who do not still understand how the system works by this time. It is something you should have learnt for a good period and understand properly before jumping into it with the right mindset, right psychology and the right knowledge to succeed without unnecessary problems here and there.

[Smack That Ace]

What type of investment or asset can easily generate profit?

Bitcoin is just like any other investment. The difference between them is that each type has its own cycle and require specialized knowledge and patience to generate profit. Bitcoin is even considered an investment that offer faster and larger return due to its shorter cycle. That is also why we chose Bitcoin. However, despite its shorter cycle, Bitcoin is not a tool for getting rich quick overnight.

Therefore, those who want to get rich quickly and lack patience should not invest in it.

Stores of value often move at a slow and steady pace. Such is the case with Bitcoin and Gold. Bitcoin moves much slower than altcoins, but as not much as Gold. Often times, high rewards come with a high risk of loss. Especially when returns are obtained within a short time frame.

Most people quickly get disappointed of Bitcoin's short-term performance, and move to altcoins instead. Such decision could lead them to financial ruin if the altcoin of choice goes all the way down the drain in an instant. Better play it safe with low risk/reward coin such as Bitcoin, then worthless "meme" coins. Just my two stats.

No, a highly volatile asset can also be a store of value. Volatility is not a criterion for evaluating the ability to store value. Any asset that can maintain its purchasing power and increase in value over the long term is a store of value, regardless of its short term fluctuation. Safe haven asset require stability.

Altcoin are gambling, not an investment. Those who are pouring money into altcoin are hoping to make millions of dollars in profit in the short term. They are simply gambling, and they are gamblers, not investor.

[Abiky]

No, a highly volatile asset can also be a store of value. Volatility is not a criterion for evaluating the ability to store value. Any asset that can maintain its purchasing power and increase in value over the long term is a store of value, regardless of its short term fluctuation. Safe haven asset require stability.

Altcoin are gambling, not an investment. Those who are pouring money into altcoin are hoping to make millions of dollars in profit in the short term. They are simply gambling, and they are gamblers, not investor.

It's a valid argument. The only downside is that Bitcoin can't be used for offline transactions, the same way as Gold can. At least, not in a practical way. Many people prefer stores of value to be tangible and highly-accessible when disaster strikes. Something living in cyberspace, won't have the same feeling.

Since Bitcoin is relatively new to the world, it's going to take quite some time before it reaches the same level of trust/confidence as Gold or any other traditional store of value. A good thing Bitcoin is scarce by design. It's also the most decentralized crypto. Hopefully, it remains this way forever.

[Smack That Ace]

It's a valid argument. The only downside is that Bitcoin can't be used for offline transactions, the same way as Gold can. At least, not in a practical way. Many people prefer stores of value to be tangible and highly-accessible when disaster strikes. Something living in cyberspace, won't have the same feeling.

Since Bitcoin is relatively new to the world, it's going to take quite some time before it reaches the same level of trust/confidence as Gold or any other traditional store of value. A good thing Bitcoin is scarce by design. It's also the most decentralized crypto. Hopefully, it remains this way forever.

In fact, both digital and tangible asset have their own advantage and disadvantage. Although digital assets like bitcoin cannot be used without internet or electricity. But in return, storing and transporting them becomes easier. Meanwhile, tangible asset can be used without the internet. However, they are quite bulky, making storage and transportation more difficult.

Bitcoin has enormous potential and could become a global safe haven, not just a store of value. But the problem is, everything take time. Many of us are too impatient and overlook the fact that bitcoin is still very young.

[Bryan jessy]

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.
.

bitcoin is a good store value and this has been proven over the years. The fact that bitcoin is highly volatile doesn't mean it is not a good store of value. Bitcoin being volatile in nature is even something that makes it a good store of value because it act as a hedge against inflation. If bitcoin was to be a stable asset definitely inflation will eat it values up as time passes by there by making it not to be a good store of value.
Volatility doesn't mean only downward trend but it comprises both downwards and upwards trend. With this in mind there won't be much fear of selling whenever there is a sudden decline in price.

Honestly the fact that Bitcoin is volatile does make it less of value, volatility does not mean that it is not good, it just means that we can not always be sure about it price, or predict it price. And is the short term investors that usually have issues with this volatile nature of Bitcoin as long term investors has little or no risk at all, the deflation and inflation is what makes it volatile, and this is normal, because anything that has value undergoes some changes, we can not expect it to be stable or have a fixed price because the market system must eventually change resulting in either increase or decrease in price, it should not discourage anyone from taking part in Bitcoin investments.

[Abelly]

It works well for those who believe.

To be a successful Bitcoin holder you need to believe in the system.
Someone who don't like bitcoin can't be progressive at holding.
It takes more than wanting to make money when you want to become a Bitcoin holder, it's not going to be easy.

You can't expect someone who want to become a millionaire in 2027 to say that Bitcoin is a good store of value, because before that time gets here or even after, Bitcoin can lose alot of value.

If you are not a believer you won't have the patience to see the fruit get ripped.

Belief helps, but I think understanding why bitcoin moves the way it does is even more important. A lot of people call it a poor store of value when they focus only on short periods, especially during big drops. But store of value usually makes more sense when viewed over a longer timeline, because short-term volatility is still part of how Bitcoin behaves.

For me, the difficult part is that many new holders enter with fast expectations, then lose confidence when the market does not match that timeline.

1. Your observation is very close to reality, Bitcoin's volatility is not a weakness, but rather a natural feature of being still in the price discovery stage. New market participants, leverage trading, macroeconomic news, all these combine to create large price changes in the short term.

2. For those who J it as a store of value, the timeframe is the most important. Although it seems risky in the short term, its performance has outperformed many other assets over a 4 year cycle in the long term, this is real data.

3. The main Problem of new holders is wrong expectations. They bring a quick profit mentality, but Bitcoin demands patience and discipline. Both DCA and mental preparation are very important here. If you try to bring the market to your timeline, you will be disappointed, but if you can adapt your timeline to the market, the results are different.

[Danica22]

Honestly the fact that Bitcoin is volatile does make it less of value, volatility does not mean that it is not good, it just means that we can not always be sure about it price, or predict it price. And is the short term investors that usually have issues with this volatile nature of Bitcoin as long term investors has little or no risk at all, the deflation and inflation is what makes it volatile, and this is normal, because anything that has value undergoes some changes, we can not expect it to be stable or have a fixed price because the market system must eventually change resulting in either increase or decrease in price, it should not discourage anyone from taking part in Bitcoin investments.

Inflation and deflation do impact Bitcoin, but primarily in the long term, not the short term. Bitcoin's volatility is primarily due to supply and demand, or speculation and manipulation.

However, you are right. Its volatility does not make it better or worse, that is not a criterion for judging Bitcoin. Volatility only makes predicting Bitcoin's trend more difficult.

[Dogedegen]

1. Your observation is very close to reality, Bitcoin's volatility is not a weakness, but rather a natural feature of being still in the price discovery stage. New market participants, leverage trading, macroeconomic news, all these combine to create large price changes in the short term.

2. For those who J it as a store of value, the timeframe is the most important. Although it seems risky in the short term, its performance has outperformed many other assets over a 4 year cycle in the long term, this is real data.

3. The main Problem of new holders is wrong expectations. They bring a quick profit mentality, but Bitcoin demands patience and discipline. Both DCA and mental preparation are very important here. If you try to bring the market to your timeline, you will be disappointed, but if you can adapt your timeline to the market, the results are different.

1. That is right, people forget that this is how it has to be in things that are in this price discovery stage. Nobody really knows when it will end or reach a definite plateau because of the times that we live in. We are going to see volatility for many years to come, maybe even multiple decades but what we can see already from the past is that this volatility has been decreasing. So while it may still be higher than some other things, that is normal and there is a good trend in its reduction.

2. Everything is risky in the short term, if you bought gold or silver near the recent ATHs before the prices collapsed they could have been considered terrible stores of value. People sometimes criticize Bitcoin in weird ways which they don't apply to other things, but doing that is not correct.

3. This is true but it is not a problem that is in any way specific to Bitcoin. This is a problem with society, and because Bitcoin stuff is primarily online and can get quite noisy during different periods of the market we just see a lot more of this kind of content. Many people called themselves investors or traders for doing 1 activity in relation to Bitcoin. Others call themselves successful and smart when they get lucky and so on. This is amplified because of the way that content is promoted online, and a lot of it is about getting rich fast, gambling, taking risks and such. Real long-term investment periods have been scrubbed because this fast paced gratification is turning people into impatient individuals.

Honestly the fact that Bitcoin is volatile does make it less of value, volatility does not mean that it is not good, it just means that we can not always be sure about it price, or predict it price. And is the short term investors that usually have issues with this volatile nature of Bitcoin as long term investors has little or no risk at all, the deflation and inflation is what makes it volatile, and this is normal, because anything that has value undergoes some changes, we can not expect it to be stable or have a fixed price because the market system must eventually change resulting in either increase or decrease in price, it should not discourage anyone from taking part in Bitcoin investments.

Inflation and deflation do impact Bitcoin, but primarily in the long term, not the short term. Bitcoin's volatility is primarily due to supply and demand, or speculation and manipulation.

It is a strange thing to write unless they mean inflation and deflation of the whole world, but that does not bring much point to this because that impacts everything that exists. If he meant it more specifically in regards to Bitcoin, then it is incorrect because Bitcoin does not shift between inflation and deflation. It currently has a very low inflation that has a controlled reduction schedule.

[Pandorak]

While stores of value are a "long-term concept", today's generation want quick results. So if they see prices going down within the short-term, they will immediately get disappointed and panic sell. Such is the situation with the OP. He's frustrated about Bitcoin's short-term performance, probably out of desperation to make money fast. Both Bitcoin and Gold are a long-term thing, so only invest in it if you're willing to build true generational wealth. For quick returns (although with a higher risk), altcoins are a much better choice.

I'm confident that BTC will continue to rise towards new heights as institutional adoption increases. With "Wall Street", banks, and governments involved in Bitcoin, prices will be a lot higher in the future. Just you wait and see.

You are probably right, and please correct me if Im wrong. Because, if I'm not mistaken, OP used to be a fervent Bitcoin supporter on our forum. But then suddenly he did a complete 180 and started complaining about Bitcoin. So, if it was not for profit, I do not see any other logical reason why he would change his mind so quickly and turn his back on bitcoin

Its only a matter of time before Bitcoin grows and reaches new record high prices. There is nothing to doubt about that, but the problem is that many people will lack patience  .

The bitcoin rally was hell of an adrenaline, everybody is super optimistic especially the newcomers who just bought bitcoin at pretty high price and when things doesn't go in their favor, of course they will feel disappointed.

I've seen many of such cases, from ultra bullish to shitting on bitcoin on bearish market but it doesn't change the fact that bitcoin's price performance has been amazing for this decade.

For those who have long been familiar with and understand Bitcoin, especially those who have invested in it or hold it as an asset, it’s clear that Bitcoin often disappoints in the short term, therefore, it’s advisable to be an investor rather than a trader. As we’ve seen and witnessed firsthand, Bitcoin has always been a promising asset in the long term, from its inception to reaching a record high of $126k in this cycle, you can calculate the magnitude of the increase yourself. Perhaps those who are disappointed are those who bought at the ATH or those who wanted to make a big profit in a relatively short time, so they are very disappointed with Bitcoin current decline, which has reached -50% from the ATH.

[Johnlomape]

It's a valid argument. The only downside is that Bitcoin can't be used for offline transactions, the same way as Gold can. At least, not in a practical way. Many people prefer stores of value to be tangible and highly-accessible when disaster strikes. Something living in cyberspace, won't have the same feeling.

Since Bitcoin is relatively new to the world, it's going to take quite some time before it reaches the same level of trust/confidence as Gold or any other traditional store of value. A good thing Bitcoin is scarce by design. It's also the most decentralized crypto. Hopefully, it remains this way forever.

In fact, both digital and tangible asset have their own advantage and disadvantage. Although digital assets like bitcoin cannot be used without internet or electricity. But in return, storing and transporting them becomes easier. Meanwhile, tangible asset can be used without the internet. However, they are quite bulky, making storage and transportation more difficult.

Bitcoin has enormous potential and could become a global safe haven, not just a store of value. But the problem is, everything take time. Many of us are too impatient and overlook the fact that bitcoin is still very young.

I know that the Internet can be a very important tools for us to reach out to people around the world and because Bitcoin is digital and need Internet connection to run a transaction should be be a huge limitation to us that are using it.
It is better we have a decentralized way of running transactions without the government having full control of it than for us to run on paper and wire transfers the government can freeze and decide to stop us from running transactions. The fiat currencies that is being used today have it own limitations too but I prefer digital currency like Bitcoin because of the privacy.

[Dogedegen]

For those who have long been familiar with and understand Bitcoin, especially those who have invested in it or hold it as an asset, it’s clear that Bitcoin often disappoints in the short term, therefore, it’s advisable to be an investor rather than a trader. As we’ve seen and witnessed firsthand, Bitcoin has always been a promising asset in the long term, from its inception to reaching a record high of $126k in this cycle, you can calculate the magnitude of the increase yourself. Perhaps those who are disappointed are those who bought at the ATH or those who wanted to make a big profit in a relatively short time, so they are very disappointed with Bitcoin current decline, which has reached -50% from the ATH.

If you are an investor in Bitcoin the short term results are not relevant for you, and if you think they are relevant then you are investing wrong in Bitcoin. The most ones that are negatively impacted are people who are trying to trade, people who call themselves investors but they just bought something for the first time, people who are tricked by expectations they put themselves or others gave them and so on. We live in strange times where the definitions of all sorts of things are changing but not often in a positive way. We used to talk about long-term investing in decades, and these days many people and users claim long term is considered just a few years which is incorrect. If you invest in Bitcoin the proper way and that must be the long term irrespective of the strategy used fort investing, then you will find that there is almost nothing or nothing at all in the world that has beat Bitcoin in this part of the process and that says a lot. We will see how it performs in the next decade but one must always remember that there are diminishing returns at these high prices. We can't expect a 100 times return easily from these prices as we could from the price of $100 per coin.

I know that the Internet can be a very important tools for us to reach out to people around the world and because Bitcoin is digital and need Internet connection to run a transaction should be be a huge limitation to us that are using it.

The requirement for an internet connection is not a limitation of any kind, we do not live in old times anymore. Many more people have access to the internet than they do to banking services, actually the data shows that almost everyone in the world is on the internet except people who chose to not be or those that are extremely poor. Bitcoin is not for such individuals so they can be dismissed, and with that we can come to the conclusion that the internet connection is not a limitation at all. Also many government services, banking services and all sorts of things these days are only accessible with the internet and more are becoming this way so really we can't use this as a reason anymore. 10 years ago or more I could have agreed with you, but now I can't.