Medium of exchange or Strategic reserve for Bitcoin.

[X-ray]

If you're seeing from the perspective of bitcoin maxi, 1 bitcoin is 1 bitcoin and if we don't depend on fiat system too much, the volatility doesn't exist.

USD looks stable only because you don't pay attention to inflation. Overtime, unlike bitcoin where the volatility is bidirectional, it could go up or down. Dollar is rather 1 dimensional, it go down on the long term.

Bitcoin is a good medium of exchange and people need to pay less attention to the value in USD.

[Lida93]

Debates on this topic has shown that both price stability and consistent price rise can't be simultaneously achieved with such a volatile asset as bitcoin. So if we gonna have it as more of a means of exchange then we shouldn't be expecting a price rise anymore than we have, that means we will be experiencing a gradual price declining than an upside in value of bitcoin as it is with fiat. But serving as reserve where many buyers are accumulating in storage and not selling, pushing price more to the upside, diminishing any iota of  stability.
_{It's really confusing to put it straight out in words  for easy understanding}

[dzungmobile]

Debates on this topic has shown that both price stability and consistent price rise can't be simultaneously achieved with such a volatile asset as bitcoin. So if we gonna have it as more of a means of exchange then we shouldn't be expecting a price rise anymore than we have, that means we will be experiencing a gradual price declining than an upside in value of bitcoin as it is with fiat. But serving as reserve where many buyers are accumulating in storage and not selling, pushing price more to the upside, diminishing any iota of  stability.

The market has different phases with low or high volatility and it's not exception with the Bitcoin market so when people understand about the market cycle well, they will feel less panic by having better preparation from knowledge to psychology and action in this market.

Assuming that if people are ready to trade Bitcoin, they already accept its market volatility so with such people, they have no big problems of using bitcoin as a medium of exchange. I meant, not all people are like this, but most people are like this, and it comes from a fact that most traders lose money in market without complaints about market volatility.

It's a little bit difference in perspective of business companies but with time, Bitcoin market volatility will shrink smaller, and it will become a smaller barrier for business accepting bitcoin.

[FinneysTrueVision]

Bitcoin is not that volatile on a day to day basis, but the fact that it can occasionally have significant drawdowns over short periods has almost certainly hurt its adoption as a medium of exchange. Speculative investment and store of value are by far more popular use cases. You can argue that its not a great store of value either as we have seen during bear markets, but there are still some people who will prefer to hold Bitcoin over fiat currency despite those price swings.

[ThemePen]

Bitcoin is not that volatile on a day to day basis, but the fact that it can occasionally have significant drawdowns over short periods has almost certainly hurt its adoption as a medium of exchange. Speculative investment and store of value are by far more popular use cases. You can argue that its not a great store of value either as we have seen during bear markets, but there are still some people who will prefer to hold Bitcoin over fiat currency despite those price swings.

I think that Bitcoin does not necessarily have to be stable currency to be huge success at moment. Major function of it is to serve as censorship resistant store of value outside of traditional monetary banking. Network is still safe and decentralized even in bear market and fiat can never provide this. I think in future, with market becoming more mature, and total market cap increasing, volatility will naturally become less, so it becomes more useful for day to day use.

[suzanne5223]

Yes, I believe the strategic Bitcoin reserve will likely have an impact that will support an increase in Bitcoin prices over time and also reinforce BTC's role as a store of value. But the effects depend on implementation rules and regulations for the strategic reserve, purchases, and longterm holding. However, we shouldn't rely on the governments statement because of their political games.

[Livingleged]

Bitcoin is a good medium of exchange and people need to pay less attention to the value in USD.

Yes sure bitcoin is a good medium of exchange Which can actually be use to pay for goods and services, or even transfer services through the means of p2p without intermediaries. But the question is how many of us actually use it to pay for good? How many store are always available to take bitcoin on exchange for their good? Unless those bridges are gaped. Bitcoin is always valued in $, you cant say people should pay less attention to its value in $. However, bitcoin is generally considered as store of value than just being use for day to day transactions. And if that’s the case it corresponding value in dollars should be a matter of concern as spending bitcoin alone is sometimes challenging. That’s why most people keep storing it and pay for services with USD or their fiat currency.

[Aanuoluwatofunmi]

Bitcoin has a multi-faucet application used and this has been increasing it demands on all sides, there is a lot that has been contributed to the bitcoin network upon the introduction of the spot bitcoin ETF, but only been a few years to understand the figurative aspect of how they differentiate between investing in Bitcoin and any other institutional assets like the spot bitcoin ETF.

[DiMarxist]

Bitcoin can work as a strategy reserve were wealth can be stored and preserved this is the reason why most people see bitcoin as a store of value were individuals can save their money against the effects of inflation, there by making Bitcoin a good preserver of wealth moving into the future. Bitcoin can also work as a medium of exchange because Bitcoin were originally designed to work as a p2p payment methods when it was been introduced so do whether you say that the value of Bitcoin may not be too high working as a payment medium it doesn't make any difference Bitcoin can work as both.

[AmoreJaz]

Bitcoin can work as a strategy reserve were wealth can be stored and preserved this is the reason why most people see bitcoin as a store of value were individuals can save their money against the effects of inflation, there by making Bitcoin a good preserver of wealth moving into the future. Bitcoin can also work as a medium of exchange because Bitcoin were originally designed to work as a p2p payment methods when it was been introduced so do whether you say that the value of Bitcoin may not be too high working as a payment medium it doesn't make any difference Bitcoin can work as both.

The high volatility of btc makes it very attractive to investors. And with such promise of gaining profits by storing for certain period of time, people are storing it for investments. And when you talk about investments, the value is increasing thru time.

[d5000]

If you're seeing from the perspective of bitcoin maxi, 1 bitcoin is 1 bitcoin and if we don't depend on fiat system too much, the volatility doesn't exist.

The problem is that you can't disconnect that easily from the fiat value.

Let's take a place like El Salvador's Bitcoin Beach, with many businesses accepting Bitcoin. I'm sure they will charge you more BTC for a hamburger on a day where Bitcoin is at $60,000 than at a day where it is at $80,000, even if they can sometimes pay some employees and perhaps even wholesale providers in BTC.

We could imagine something more extreme of course, let's say some kind of Bitcoin island where all businesses without exceptions accept Bitcoin. They could perhaps charge "static" Bitcoin prices for each other. But as soon as a good they sell has at least some component which needs to be purchased from abroad, it becomes much more difficult.

Neverless I'd be very interested in such experiments. Another idea could be non-material goods with static BTC prices.

For example an artist selling music could attempt to charge static Bitcoin prices, which would lead to them accumulating BTC in bear markets. But in peak bull market / ATH territory their sales would be much lower, that's the problem here, and thus I don't think an artist could sustain that idea for much.

[Abiky]

I was going through the thread about Bitcoin strategic reserve and it got me thinking.
Strategic reserve would increase the price and make Bitcoin more like a store of value
But adopting into a medium of exchange would mean the price wouldn't shoot again and become relatively stable
Because I can't really picture a medium of exchange that's quite volatile.

I understand scalability constraint, so it's more of an hypothetical situation to compare
Which would push the price higher and which would keep true to what Bitcoin was created for.

Sigh Now I don't even know what I'm talking about anymore 


In summary how would stability that I believe a accepted medium of exchange should have
Align with a decentralized asset?
Would stability always be hypothetical and scarcity drive price?
Or we have what money should be
One that don't fall with time but stay relatively consistent and keep up with price changes.


Sigh wtf am I even saying, will likely lock when I'm sober and awake.

Why not both? Bitcoin can be both a medium of exchange and a store of value. Just like Gold. It's just that most people are using it as a store of value. Almost nobody wants to use it as a currency. For obvious reasons. Because Bitcoin is volatile with limited transaction capacity. It was designed with a fixed supply, raising the odds of higher prices in the long term.

You can see why many governments around the world are considering making strategic Bitcoin reserves of their own. I believe BTC's status as a gold alternative will remain unchanged forever. We just need to deal with it.