The eight critical factors are eight characteristics that help determine what constitutes a store of value, according to JPMorgan Chase, and how Bitcoin stacks up against physical gold in each category. In total, our estimates of the world value of stores of value that are comparable to bitcoin, including savings accounts, small and large time deposits, money market funds, and bullion, total $47.1 trillion US dollars. Citing Bitcoins $700 billion market cap, as opposed to about $2.6 trillion of gold held as investment, Goldman Sachs said Bitcoin now has 20% share in the store-of-value market. [Sources: 0, 5, 6]
Similar to gold, people purchase individual bitcoins not because they expect to be able to walk into a shop and spend them, but because they expect them to retain their value, Galen Moore, data and index manager for cryptocurrency news outlet Coindesk, told NextAdvisor recently. People think that one day Bitcoin will be worth more than today, and that increases their demand for it, which keeps its value rising, just like gold. The price of an individual bitcoin fluctuates widely, and there is no way of knowing if it will keep growing in value or fade into obscurity, so it is wise to allocate just a tiny portion of your total assets to bitcoin. [Sources: 1]
Bitcoins value really does come from users faith in Bitcoin, but unlike Tulips, you cannot really farm it up more to meet demand. In that sense, Bitcoins and other cryptos high volatility makes it almost impossible to imagine that it would ever be a store of value or reliable medium of exchange. While bitcoins peer-to-peer nature grants Bitcoin immunity to human interference (albeit 51% attacks), it also comes with certain limitations from a usability perspective, which could be invoked to further solidify Bitcoins status as a more gold-like store of value, and less a virtual currency to be used on a daily basis. The amount of units is finite, Bitcoins network is sufficiently decentralized to provide security for holders, and can be used for value storage and transfers. [Sources: 4, 7, 8]
While the software is artificial, the networks decentralization means Bitcoin acts more like a natural resource rather than a piece of code that could be arbitrarily altered. Bitcoins immutable money supply makes Bitcoin a better vehicle for the storage of value created by humans. While other stores of value require high-level security, are risky, or are expensive to move, bitcoin -- whether $100 or $100 million -- can be stored and accessed with little more than a memorably remembered password (and, with shared wallets, single-point-of-failure risks can be mitigated). Bitcoin is the least expensive way to purchase the future, as Bitcoin is the only medium guaranteed to never be debased, regardless of how high the Bitcoin value goes. [Sources: 2, 3, 7]
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Is Bitcoin A Ponzi Scheme?
SOCIAL MEDIA LINK:
SOURCES
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[0]: https://markets.businessinsider.com/news/commodities/bitcoin-versus-gold-store-of-value-comparison-crypto-btc-jpmorgan-2022-1
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[1]: https://time.com/nextadvisor/investing/cryptocurrency/why-do-bitcoins-have-value/
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[2]: https://medium.datadriveninvestor.com/3-reasons-why-bitcoin-will-be-the-global-store-of-value-in-the-future-d7fe601998db
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[3]: https://www.bitcoin.com/get-started/is-bitcoin-a-store-of-value/
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[4]: https://www.santander.com/en/press-room/insights/bitcoin-store-of-value-or-speculative-investment
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[5]: https://www.reuters.com/business/finance/goldman-sachs-says-bitcoin-will-compete-with-gold-store-value-2022-01-05/
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[6]: https://www.investopedia.com/ask/answers/100314/why-do-bitcoins-have-value.asp
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[7]: https://academy.binance.com/en/articles/is-bitcoin-a-store-of-value
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[8]: https://cointelegraph.com/news/defining-bitcoin-money-currency-or-store-of-value
