Medium of exchange or Strategic reserve for Bitcoin.

[Darker45]

Due to its design, I'm afraid Bitcoin can't avoid being treated as a strategic reserve. In the first place, it's decentralized. It doesn't have counterparty risk. Moreover, its supply is fixed. It's, therefore, an attractive asset to be used as a strategic reserve.

However, it doesn't necessarily mean that if it's being utilized as a strategic reserve, it won't anymore function effectively as a medium of exchange, nor does it mean that it won't shoot up again.

I guess what lessens Bitcoin's volatility isn't necessarily how it's perceived or it's used but its level of adoption. Even if Bitcoin is used as a strategic reserve, for as long as the adoption is much wider, it would cease to be as volatile as today. The price won't anymore nosedive due to the decision of one institutional owner.

[BlackHatCoiner]

But Fiat would always look like a dollar today is same tomorrow because many don't focus on the real cost.

Because the US dollar has a ton more liquidity and it is completely normalized by the world. If instead of fiat, we had a bitcoin standard, you wouldn't notice deflation over short time periods either.

The volatility of bitcoin is completely justified for a total market cap of only $2 trillion. The US dollar has more than triple the entire market cap of bitcoin as a daily trading volume alone, and is backed by nearly every State of the world as every nation is a bagholder of US dollars.

[SeriouslyGiveaway]

Because the US dollar has a ton more liquidity and it is completely normalized by the world. If instead of fiat, we had a bitcoin standard, you wouldn't notice deflation over short time periods either.

The volatility of bitcoin is completely justified for a total market cap of only $2 trillion. The US dollar has more than triple the entire market cap of bitcoin as a daily trading volume alone, and is backed by nearly every State of the world as every nation is a bagholder of US dollars.

The Declining Purchasing Power of the U.S. Dollar
The USA national debt continues its rise with time and that is very big red flag for more effects on purchasing power of US. Dollar.
The USA debt clock.

Not only the USA, other nations globally have similar issues with their national fiat currencies from inflation rates to declining purchasing power. Bitcoin was created by Satoshi Nakamoto not to fix governments or fiat currencies, just to give people globally a chance of moving away from traditional bank systems, have their own Bitcoin banks, avoid inflation or at least reduce its effects on their wealth by saving their money in bitcoin.

[Satofan44]

Most of the currencies in the world are fairly volatile, and most are more volatile than Bitcoin. The USD has even had a quite volatile last 12 months. Therefore, yes you can absolutely use a fairly volatile currency as a medium of exchange.

Yeah my country's currency is an example of such volatility
But it's not noticeable since like I stated before in majority perception the currency nominal value remains unchanged
The Iran currency even imitated how shitcoins work.

Well of course it is, and that is how it is supposed to be given the details of how perceptions of both cases come to be. How does an average person get familiar with their own currency growing up? It is money that you have to use, money that circulates, prices of things are in that currency and that is all that you know. You spend it, you use it, and you never think about inflation, or even exchange rates which you may only sometimes encounter if you need to get other currencies. Naturally you are basically programmed to ignore it unless you are an exceptional case. How do most people encounter Bitcoin? So many topics and so much talk about the price (the most boring and useless part of Bitcoin), so much focus on alleged cycles, trading, leverage. Therefore, most people have made themselves obsessed with this. How many fiat users look at the exchange rate daily or several times per day compared to Bitcoin or crypto users? Very few in %.

My question was supposed to be what would have a bigger impact on price
Medium of exchange or store of value
When Gold was the money the price didn't really go up like we see today since prices were measured in Gold
It showed in the prices of goods
But it started looking like it's quite volatile when it became of store of value.

The demand works stronger in cases of store of value for something that has a limited supply like Bitcoin, or a somewhat constrained supply like gold. A medium of exchange works best at stable prices and since very few value or want it for other reasons it tends to have a more stable price with all things being equal. The primary reason why fiat is unstable is due to the government manipulations and interventions (and other decisions). If they left it in peace (but they won't since it is profitable to abuse it), it would have much lower volatility.

[Grace333]

It can be both. Volatility would be reduced, but it would still be volatile enough to be a store of value and stable enough to be a medium of payment. We can already see how Bitcoin's volatility has reduced compared to how it was years ago. These days, the rate of Bitcoin's price fluctuation within 24 hours is less than 3%. It can be 3-5% on bad days. Meanwhile, the long-term price increase still makes it a store of value.

The more Bitcoin's market cap increases, the more volatility will be reduced. I don't believe volatility will ever completely be gone and Bitcoin to be stable like fiat currencies, but I believe it would be stable enough to be used for payment.

Indeed the more market cap the less volatile bitcoin will become, some people may argue this but it is what it is. And what made it so is the fact that as more people adopt bitcoin the price of the coin increases and it begins to make some transactions amount insignificant to the price chart of bitcoin. $10000 into bitcoin in 2015 would created a ripple in the price but today that amount wouldn't have same effect in the chart. But that doesn't mean volatility is gonna end when more people adopt bitcoin it definitely will be a store of value as it has been but due to reduction in the momentum it uses the profit as per investment will be reduced compared to previous years.

[dansus021]

Are u Sober and awake bro hahaha


The debate over whether Bitcoin is a Strategic Reserve or a Medium of Exchange is arguably the defining economic question of 2026 and I dont know maybe long long long way before this 2026. The CLARITY Act is moving through the US Senate this week. It has created a political tailwind that pushed BTC above $80k, as you might know a single word from US or the Donald Trump could make bitcoin up and down like crazy.

On the other hand, major players like BlackRock and even other companies are treating their Bitcoin as a treasury asset. When governments and corporations lock Bitcoin away in reserves, they remove it from circulation, driving up the price for everyone else.

Bitcoin as medium of exchange is kinda different before this I made a post that basically how different Bitcoin and stablecoin, Nobody use bitcoin to buy a coffee with current transcation unless you are using lightnign network or other Layer 2 and its the key so Bitcoin could be use as medium of exchange

[Abiky]

The Declining Purchasing Power of the U.S. Dollar
The USA national debt continues its rise with time and that is very big red flag for more effects on purchasing power of US. Dollar.
The USA debt clock.

Not only the USA, other nations globally have similar issues with their national fiat currencies from inflation rates to declining purchasing power. Bitcoin was created by Satoshi Nakamoto not to fix governments or fiat currencies, just to give people globally a chance of moving away from traditional bank systems, have their own Bitcoin banks, avoid inflation or at least reduce its effects on their wealth by saving their money in bitcoin.

Well, the idea of backing Fiat currencies with Bitcoin has been floating around for some time. For the USD, some say it's impossible since the huge national debt surpasses the whole market cap of BTC. But hey, governments used to back Fiat currencies with Gold. Even if the "yellow metal" has a "small" market cap (compared to nations' debt). Never say never.

Still, Bitcoin can be used as a "strategic reserve" asset without backing Fiat with it. Current developments tell us how quickly Bitcoin is getting into the mainstream. Banks, governments, and "Wall Street" are deep in the game. A huge increase in market price awaits us. Better buy and "hodl" BTC now before it's too late.

[KingsDen]

Cant Bitcoin be both a medium of exchange and a strategic reserve both at the same time?
Isnt that what it is currently?

That's what it is currently, but going forward I believe bitcoin will tilt more towards the strategic reserve wing. This confusion or let's say, the dual usage of bitcoin started some years back, even before the ETF and US strategic reserve.

Those days, if someone buys a product with bitcoin, they will be praised.
If another pay a doctor with bitcoin, he will also be praised.
If another says how they haven't spend any bitcoin for 8 years, they will be praised also.

That was when I knew that, it was all about freedom. Just use bitcoin as you wish. But going forward, bitcoin has shown its strength more as an asset to be saved than as a currency to be spent.

[monetizator4]

Bitcoin has indeed served both roles, but the balance is shifting. More institutional players are holding BTC as reserves, while retail usage remains niche. The CLARITY Act and potential US government involvement might push it further into strategic reserve territory. Still, its use as a medium of exchange persists in some communities.

[DiMarxist]

Bitcoin has indeed served both roles, but the balance is shifting. More institutional players are holding BTC as reserves, while retail usage remains niche. The CLARITY Act and potential US government involvement might push it further into strategic reserve territory. Still, its use as a medium of exchange persists in some communities.

I don't think that the balance is actually shifting because we all know the use that Bitcoin was developed for. We are only seeing institutional investors coming to the picture and making it look like there is a shift in the way that people view Bitcoin. Institutional investors has only realized that Bitcoin could be a good store of value that is the reason why we are seeing, all these Institutional investors. Bitcoin can now be see from the both sides as a a medium of exchange or strategic reserve but the fact is Bitcoin is a medium of digital exchange that was supposed to be decentralized.

[Satofan44]

The debate over whether Bitcoin is a Strategic Reserve or a Medium of Exchange is arguably the defining economic question of 2026 and I dont know maybe long long long way before this 2026.

Not really, because the way that you set up the question and many others do is wrong. It is not an or question, it can be both things and to some degree. These functions are not binary options, either it is or it is not. They are on a scale, it is already both to some degree -- we don't need to specify exactly how much as that would be subjective.

On the other hand, major players like BlackRock and even other companies are treating their Bitcoin as a treasury asset. When governments and corporations lock Bitcoin away in reserves, they remove it from circulation, driving up the price for everyone else.

Very few companies are using it as a treasury asset, and as such this should not be mentioned as only a few examples exist. I would not even mention it at all until some of the big companies get in on this and in a way that shows long-term commitment. If a big company adopts it only to dump it a year or two later, it is meaningless. People are desperate to find the "next big thing" happening, that is why the put false valuation on rather meaningless events.

Bitcoin as medium of exchange is kinda different before this I made a post that basically how different Bitcoin and stablecoin, Nobody use bitcoin to buy a coffee with current transcation unless you are using lightnign network or other Layer 2 and its the key so Bitcoin could be use as medium of exchange

Bitcoin works fantastically as a medium of exchange, with or without Lightning. If people and merchants do not know how to use it correctly, that is an issue with them and not an inherent problem with Bitcoin.

Well, the idea of backing Fiat currencies with Bitcoin has been floating around for some time. For the USD, some say it's impossible since the huge national debt surpasses the whole market cap of BTC. But hey, governments used to back Fiat currencies with Gold. Even if the "yellow metal" has a "small" market cap (compared to nations' debt). Never say never.

This idea is unlikely and not even popular enough to bring up for discussion. It may change in the future, but don't talk about it as if it is actively being explored or tried by several entities -- it is not. Having a few panel discussions about it is not the same as seriously considering doing it.