Bitcoin could become digital gold ... and then the digital Swiss Franc

[d5000]

Another thing is that Swiss Francs can be stronger than United States dollar, but it still has fiat characteristics which is long term devaluation, bitcoin will be the opposite of that.

I've looked at the stats and there was 0.5 % inflation per year in Switzerland between 2003 and 2025. This means you're correct: there is still a small value loss (to be precise, 12% in that whole timeframe). If you held CHF in the US your loss was lower (a little bit less than 10%) but still the Franc didn't manage to outpace inflation.

What's also interesting is what happened to the CHF's supply: its M1 grew a lot (from 250 to 750 between 2003 and 2023) but in "waves": first in the 2010-13 Eurozone crisis (when deposits in CHF was massively used to escape the Euro's devaluation, so a M1 expansion "made sense" as it matched its growing demand) and then the COVID crisis. From 2022 on the supply was stable.

Of course one has to take into account that the Swiss Central Bank on purpose increased its supply to avoid deflation and match the growing CHF demand. That's something impossible in the case of Bitcoin, but the massive demand increase between 2009 and the late 2010s was somewhat countered by the high Bitcoin emissions in that era (first 3 halvings).

Currently we have around 0.8% supply inflation per year in Bitcoin. This is interestingly close to the Swiss Franc's devaluation in terms of value, but that only has relevance if the Franc 1) continues to be as stable as now and 2) doesn't expand its supply again massively.

No one is going to be interested in Bitcoin if they can earn more from savings accounts, time deposits, and money market funds.

I think there is a logic problem with your sentence. If the Bitcoin price really grows 2% per year, this means that there is enough demand to sustain that price. So there are people interested in it, by definition

Of course if we don't reach the "currency" state which is of course a real possibility (as you point out) then what may happen instead is a period of low growth (sideways market or low ATH increase, like in the case of Ethereum or Solana) with high volatility, and that is indeed a "dangerous" scenario for bulls.

I don't think it would mean the death of Bitcoin. Gold has shown that even a 20 year long bear market (1980s-2000) still leads to some interest and then again very bullish conditions. But as Bitcoin lacks Gold's tradition and age, in such a scenario I would expect a sharper crash, but always with the potential to turn bullish again.

The "currency scenario" would be, in my opinion, very positive also for Bitcoin bulls. Bitcoin can't grow infinitely by influx of speculative capital, as speculative capital needs returns and like you say it would flow out if the returns are too low. If we see an evolution towards currency usage, I'd expect however a transition stage between "digital gold" and "Swiss Franc", where the returns would still be attractive but the stability would continue to increase.

As I wrote before I see some more currency usage than 5 years ago, but it is too early to say if this tendency can continue or if it was only a consequence of a combination of effects (like the COVID lockdown "digital boom" and the general digitalization of payments, and also the 2023-25 bull market).

Why do you write this like you're the first person to come up with the equivalence? People have been comparing bitcoin to gold for 10+  years because the connection is obvious.

In the case of gold this wasn't my intention, I even mentioned in the OP that "digital gold" is a popular narrative, and it's almost as old as Bitcoin

But the "digital Swiss Franc" scenario is indeed something new, I have before googled it to see if someone came up with that analogy. I have only found articles and videos that Bitcoin was becoming the "digital Swiss bank" [1] [2], which is something different because it is more related to privacy.

[1] https://www.ynetnews.com/business/article/b1pdt2zlxl
[2] https://www.youtube.com/watch?v=kqsmCUo3xEQ

[Dr.Bitcoin_Strange]

Now we all know that Satoshi designed Bitcoin as a "peer to peer cash". So ... could Bitcoin ever be "re-branded" as a "currency" or "cash"?

I think a good target for the next decades is that Bitcoin could be the digital Swiss Franc.

Bitcoin as the Digital Swiss Franc would be an attractive long time scenario: Bitcoin protecting you from inflation and even maybe giving you a small profit (according to your local inflation), but at the same time, be a stable and usable currency, not an asset where you have to look all the time at the chart to not miss an opportunity.

What do you folks think? I'm sure it's still too early and we'll probably first proceed into the Digital Gold era (if Bitcoin's success continues). But then: would you consider it a good thing if Bitcoin matures further and gets considered the Digital Swiss Franc? Or would you prefer a little volatility, like with gold?

Who is going to rebrand Bitcoin to a currency cash or digital Swiss Franc? Changing the public image of Bitcoin, the legal classification, and how people actually use it does it necessarily require that Bitcoin's technology has to be changed before it can be viewed differently by people? Or the re-branding you are talking about does not require changing its technology?

Like you already said that Satoshi designed Bitcoin as a "peer to peer cash" But today, Bitcoin's identity has evolved, we have traders using Bitcoin's volatile nature to trade it for a short term profit, we have investors that are holding as an asset  and those that are using it for p2p daily transaction. The technology is the same but different people are using it for different purpose, an example is the "legal classification" That I mentioned above, we had El Salvador who decided to classify or make Bitcoin a legal tender.

Many people are treating Bitcoin as a store of value and investment asset, they buy it, hold it, and hope that the price will appreciates and as such they don't spend it on everyday purchases, and  I think that's how come about the narrative that Bitcoin is a digital gold, so we are in that era. I would consider it good that Bitcoin still retain its volatility instead of being stable like Swiss Franc, I believe that traders and investors would also want that volatility remain as it is.

[Tamaperdana]

Snip

What do you folks think? I'm sure it's still too early and we'll probably first proceed into the Digital Gold era (if Bitcoin's success continues). But then: would you consider it a good thing if Bitcoin matures further and gets considered the Digital Swiss Franc? Or would you prefer a little volatility, like with gold?

To be honest, whether Bitcoin becomes a currency or remains a volatile asset, I’ll still love it. Because even though Bitcoin’s price is still very volatile right now, the reality is that Bitcoin can help protect our money from being eroded by inflation. So let’s not talk about the future just yet, because even right now, Bitcoin already offers us incredible benefits. That clearly makes me very happy. So, regardless of whether Bitcoin becomes a currency or not, it will still be a good thing and will serve as a solution when the value of our country’s currency continues to decline.

[d5000]

Who is going to rebrand Bitcoin to a currency cash or digital Swiss Franc?

Bitcoin "branding" is a community process. I've linked the thread in the OP where this topic was discussed and what inspired me to this one

A lot of people, communities, "leaders of opinion" (like M. Saylor or A. Antonopoulous) take part of that process, and even we in this forum can contribute how people view Bitcoin, because there is no centralized entity who decides the branding. But there are narratives that get "established" eventually, like the "digital gold" I already mentioned.

Changing the public image of Bitcoin, the legal classification, and how people actually use it does it necessarily require that Bitcoin's technology has to be changed before it can be viewed differently by people? Or the re-branding you are talking about does not require changing its technology?

Technology change is not strictly necessary, at least the core protocol can stay as it is (with continuous improvements, as those we're seeing now).

But to change from the "store of value" to a "currency" "branding" we would need better L2 technology to solve the problem of handling millions or even billions of payments per day. Bitcoin doesn't need to compete with Visa but to become a "currency" at least all current Bitcoin "users" should be able to regularly carry out mid- to high-value payments.

A different legal classification can also help, because the current "store of value" oriented legislation it becomes cumbersome to report the profits for tax purposes. I think however this will only happen if there is actually more usage for payments.

I would consider it good that Bitcoin still retain its volatility instead of being stable like Swiss Franc, I believe that traders and investors would also want that volatility remain as it is.

As in my answer to @Free_Market_Capitalist, the problem I see is that Bitcoin could become, once the current market segment (speculative asset which could become the digital gold) is saturated and most of the people interested in Bitcoin already own it, we could enter a sideways market without clear ATHs. This situation could rapidly evolve into a long term bear market, e.g. for 10 years or so, if "high ROI" investors lose interest in BTC.

More currency usage would protect the Bitcoin price from this scenario (I often call it the "Ethereum scenario" because Ethereum has already entered a longer-term bear market) because it would ensure a higher base demand, e.g. by merchants.

[Crypto Library]

What do you folks think? I'm sure it's still too early and we'll probably first proceed into the Digital Gold era (if Bitcoin's success continues). But then: would you consider it a good thing if Bitcoin matures further and gets considered the Digital Swiss Franc? Or would you prefer a little volatility, like with gold?

First of all, I will say here that it is very difficult to say about the future, and also we know the nature of Bitcoin, it is even more difficult to say whether Bitcoin's high volatilities will decrease in the future or or will totally vanish from the bitcoin.
Even  if I summarise this research paper from BIS, then there too we will find something like this that when a large number of investors start investing in Bitcoin at the same time, the demand for Bitcoin will increase and the price will increase for this and on the other hand when a large number of investors start selling at the same time, the demand will also decrease due to the increase in self-pressure and the price of Bitcoin will also decrease due to the spread of FUD in the market. And that is why the volatility of Bitcoin will not stop.

But I also want to know that here, if the price of Bitcoin rises to a point where for changing the bitcoin price in large scale it also needs a large market inflow or outflow, can the price of Bitcoin be like gold volatilities? As we can saw the bear bottom price of bitcoin is decreasing as the day goes on.

[Dogedegen]

I'd like to share my thoughts and associations.

In my understanding, a speculative asset is something I don't personally need, but someone else definitely will. Therefore, it makes sense for me to buy it just to resell it to the person who needs it. In this sense, I wouldn't call Bitcoin a speculative asset because I actually need it: as a way to store savings that are virtually impossible to confiscate.

As I see it, the Swiss franc is a means of payment needed in Switzerland and nowhere else. For those outside of Switzerland, there can only be one reason to buy it: to resell it to the Swiss (in other words, for speculation).

Ultimately, the franc means one thing to the Swiss and something completely different to everyone else. That is why branding Bitcoin as a digital equivalent of the Swiss franc confuses me. It requires too much explanation, and that's just not how branding works.

If you think about it, we are all using a speculative asset that we all need and it is our fiat currencies. We are forced to use them by law and threat of punishment, they do not really have a utility so they can be considered speculative too. If we removed legal tender laws and let the free market decide, then people would quickly realize how this is true. Most fiat currencies would go away fast proving that they were speculative the whole time, it was just that a forced order made it look like they were not..

Why do you write this like you're the first person to come up with the equivalence? People have been comparing bitcoin to gold for 10+  years because the connection is obvious. It also opens the analogy up that other coins can equate to different precious metals. Ethereum as a less popular coin might be silver. I'm not sure trying to reframe it against the Swiss franc is all that helpful because many people will never use or hear about that currency compared to gold. Whether we like it or not volatility is dropping in bitcoin, although it can still be susceptible to spikes, because institutional investors are buying it and they have much less reason to sell which leaves less liquidity for the rest of the coins.

A digital silver is not needed, I believe the equivalences that include a silver next to a digital gold are wrong. Silver has emerged next to gold for many practical reasons and it has wide utility. What is the utility of a digital silver when you can do everything you can with digital gold? Small payments can be done with lightning or sidechains, and no other cryptocurrency provides decentralization, immutability and fixed supply guarantees like Bitcoin does. There is no place for a digital silver and it is time that we collectively drop this idea.

[AVE5]

I think the current most popular narrative is that Bitcoin is still a speculative asset, but with the potential to be a digital gold.

And I also think that bitcoin will continue being a speculative asset if not for the fact of predicting the uncertainty but with the fact that it's a decentralized market which its adoption does  rely on spreading its news whether negative or positive news.
The news follows that whether criticisms of hypes is somehow influencing the price and adoption.
It's also undoubtedly that bitcoin is a digital gold else, looking out to when it was launched (2010) while it was traded at $0 and now that it has batched 16 year's od existence had proven its golden potential with the fact its has gained an Ath of $126,000 plus and same time, being one of the top leading global assets.
And with it currently being at its early stages of adoption, it's convince able that price may rise to $1,000,000 in the due time.

Now we all know that Satoshi designed Bitcoin as a "peer to peer cash". So ... could Bitcoin ever be "re-branded" as a "currency" or "cash"?

Bitcoin is generally digitalized and unregulated, if there be a printed cash of it, then it's either not going to be the bitcoin of Satoshi or that the bitcoin consensus had been tampered otherwise, it's beyond imagination to see bitcoin being physical tendered.

[lombok]

To be honest, whether Bitcoin becomes a currency or remains a volatile asset, I’ll still love it. Because even though Bitcoin’s price is still very volatile right now, the reality is that Bitcoin can help protect our money from being eroded by inflation. So let’s not talk about the future just yet, because even right now, Bitcoin already offers us incredible benefits. That clearly makes me very happy. So, regardless of whether Bitcoin becomes a currency or not, it will still be a good thing and will serve as a solution when the value of our country’s currency continues to decline.

Indeed, what makes such a system very attractive is the degree of freedom associated with decentralized networks in view of the sharp depreciation of the purchasing power of fiat money. Possession of digitally represented properties ensures that there is something that acts as an effective safeguard of the genuine purchasing power of individuals amid expansionary banking systems that cause inflation in a country.

Monetary policy does not necessarily form a pre-requisite for the success of financial safeguarding measures. Saving becomes safe from continued depreciation because of unit limitations.

[Free Market Capitalist]

No one is going to be interested in Bitcoin if they can earn more from savings accounts, time deposits, and money market funds.

I think there is a logic problem with your sentence. If the Bitcoin price really grows 2% per year, this means that there is enough demand to sustain that price. So there are people interested in it, by definition

No, there's no logical problem as long as you don't take the statement literally. I'm telling you that no one would be interested in Bitcoin, just as I could tell you that no one reads print newspapers these days—which doesn't mean that literally zero people in the world read print newspapers.

[marrcelo]

The nature of Bitcoin is different of the traditional currency. The common money was built to attend needs, vanities, whims and the human greed. Already Bitcoin has a quality that differentiates it of the governmental currencies: the decentralization. This by itself already takes a bit of the human control and of the emotions of the people that command in the system.

With less power in the hands of authorities, Bitcoin becomes different of the other fiat currencies. What more resembles to it, in some aspects, is the gold, specially in the form how the price moves. Alot of people criticize the volatility of Bitcoin, but it also is one of its best characteristics. It allows buy cheap several times along the year and sell more expensive in the short term.

For the speculators of the traditional market, this arrives to be a paradise.

Now, who does not want this madness of the short term can simply think in the long term: buy, store with security and leave the time work. Without complication.