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Bitcoin is NOT a Store of Value

Bitcoin is not a Store of Value.

As a Bitcoiner this is a confusing one to reconcile. Bitcoin has appreciated for all those that have held for over 4 years, but it is not a store of value. Can bitcoin be money, an investment and a store of value?

Is gold both money and an investment? Are either a store of value?

While you’ll see a ton of bitcoin and gold influencers claim store of value. Definitionally, they are not.

Before you close the article, hear me out. Saying bitcoin is not a "store of value" is not a negative point. I believe in the long-term prospectus of bitcoin. But, this narrative may take away from bitcoin as an asset, a technological innovation, a network and as an investment.

A way to reconcile this for Bitcoiners is to claim it is an emerging store of value. I like this take. We are watching a brand new asset class which is a pure monetary good, monetize in real time.

Trying to be as succinct as possible, a better view might be: Bitcoin is a censorship resistant bet on a future store of value with no expiration.

Right now there is no store of value. The global fiat experiment has made it such. While most of the world is on a fiat standard, this will remain true.

Bitcoin exhibits some of the best monetary properties and can store your time in a censorship resistant manner. However, its volatility in purchasing power currently removes it categorically from functioning as a store of value.

As a justification of bitcoin's store of value proposition, many Bitcoiners point to the volatility fluctuations of gold during the Weimar Republic’s hyperinflation. I would say, during this time, gold was not a store of value. It could not be reliably counted on when you needed it.

If you had your basic needs met and you were able to afford to hold it throughout this period it was one of the best investments you could have made at the time in that circumstance.

Investing your savings, and/or time into bitcoin does not make it a store of value, even if your purchasing power has increased. The risk of loss of purchasing power was possible at any time frame during this investment.

A true store of value would not have this risk.

You are in fact speculating on bitcoin retaining that purchasing power or increasing that purchasing power throughout time. You are speculating on other people recognizing it’s value throughout time. The prospectus of bitcoin eventually being used as reserve currency, or widely independently used peer-to-peer remains. Its network effect continues to grow, and more people DO see the merits of holding bitcoin. With that being said this is an investment thesis.

We are speculating (even if our speculation is correct) that one day bitcoin will be a store of value.

It can have utility until we reach the point of store of value. It DOES have utility until it reaches that point, as we’ve seen throughout the beginning of 2022. It can also appreciate until it becomes a store of value.

I think this is a good thing. It has asymmetric upside of an emergent money and a potential global reserve currency in a time where central banks are devaluing sovereign currencies.

It also does so in a censorship resistant manner, meaning that, if you hold your own private keys, bitcoin represents an asset that is no one’s liability. If managed correctly, this asset cannot be frozen, or seized while (hopefully) appreciating in value over time. Along with being liquid, these factors represent excellent monetary properties.

Due to persistent low interest rates, and now high inflation rates, we’ve seen assets with worse monetary properties than bitcoin exhibit huge monetary premiums. We see this in stocks, real estate, etc. They have utility beyond money, but exhibit huge risk of losing this monetary premium and are fully censorable. While people park value here, these too are investments, not a store of value.

From Merriam-Webster: Money is something generally accepted as a medium of exchange, a measure of value, or a means of payment

Throughout history, and before our current fiat system, money has been something that is intrinsically valuable. It was typically a bearer asset with no counterparty risk. Different monies could have been a store of value through certain parts of history. Right now, it appears, we do not have both good-money and a good store of value.

Now back to my view: bitcoin is a censorship resistant bet on a future store of value with no expiration.

If accepted, bitcoin is both sound money and an investment, but it is not yet a store of value-and this is okay. Simple and/or false narratives may be deterring many from learning the true value of owning bitcoin.


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