Leo said:
The goal of a store of value is as a safe haven against depreciation that affects other assets. Predictability within certain understood constraints, particularly in relation to the base level, is fundamental. Many predict Bitcoin will attain this quality as adoption increases and demand stabilises resulting in a more predictable price, but I think most commentators agree that it's some way off the mark at this point. Ask anyone who bought in at $20k how they feel about Bitcoin as a store of value against the traditional stores.
You're cherry picking the worst example in terms of volatility. Additionally, gold has had some pretty savage corrections of its own in its not too distant past. Other than that, I think there's a misunderstanding over what makes a store of value.
Volatility is not acceptable in creating a reliable currency. However, it doesn't necessarily negate something being a store of value where store of value is deemed to be 'items where the value does not decay over time and may in fact increase in value'.
Question: If an item losses 33% of its value in a single year, is it a store of value...OR...would such an event make it null and void as a store of value?
Well I know if I came home to the missus with 8 grand in gold she would be properly happier than having the cash itself. On the otherhand if I came home and told her that instead of 8 grand in cash we know are the proud owner of a Bitcoin I'm pretty sure the reaction would be quite different!!
Well, there;'s a few things to unpack there. Firstly, I don't know yer missus - perhaps she's a raging Bitcoin maximalist! :-D
However, given that you don't believe in it, I don't think you're going to do a good job in selling that to her, right? If you sat down with her and said that you'd researched it and BTC is very risky as an investment currently but with that it has far greater breakout potential than any other asset class right now. Furthermore, that it's non-correlated and outside of the existing system (which - seems like its teetering towards recession/crash scenario) - and could act as a hedge. Finally, that you've looked at the risk vs. reward on it - and it would be worth having 5% portfolio exposure to it. But you believe what you believe - and that's fine.
Using Bitcoin (or anything else) to shield their wealth from a regime that's gone rogue will generally make them criminals too but I take your point.
Well, perhaps we need to be questioning governments a bit more, don't you think. If something is inherently unjust and it implicates personal finances, I'd sooner have it in crypto. People get labeled all manner of things - doesn't mean we have to be accepting of it.
Sadly, you'll find that those poor sods don't have much of anything anyway.... Any idea of what kind of wealth we are talking about?
Doesn't matter. There are people at all points in the wealth spectrum affected when a country is financially mismanaged.
And more importantly, given Bitcoin is up and running a decade now, any idea of how many people have used it for such purposes???
Ah, this old chestnut :-D
Bitcoin started with a few cypherpunks on message boards trading theories on how to build cryptographic money or digital gold. They've come from that to a crypto marketplace with a capitalization of $266 billion today - with it front and centre, the object of discussion and debate in the highest echelons of world politics. The internet didn't unfold for years - nor will this. There have been false dawns with AI - it's been around for years yet it's only right now it's on the precipice of having an epic impact on society. The same for the Internet of Things.
Naysayers may not be satisfied with the rate of progress of BTC/crypto but for me, it's development has been outstanding.