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Store of value depends on the time frame. Bitcoin has a four year halving cycle (the supply issuance halves every four years). If you look at the 200WMA (weekly

Store of value depends on the time frame. Bitcoin has a four year halving cycle (the supply issuance halves every four years). If you look at the 200WMA (weekly moving average), which is roughly 4 years, it's a steady march upward. So as long as your time horizon is 4+ years, it's the best savings technology you could ask for. In terms of the USD, the price of Bitcoin is volatile in the short term. But that volatility is due to its relatively small size compared to its total addressable market. The total addressable market of Bitcoin is all monetary value on earth, so in the hundreds of trillions, probably. Bitcoin's network effects have already likely reached "runaway" status, so Bitcoin will continue to grow as the network effect speeds up exponentially. Its volatility will continue decreasing as it grows to address more of the T.A.M. of global monetary value.

midislack 4y ago
>So as long as your time horizon is 4+ years, it's the best savings technology you could ask for. My US Hay, Confederated Slaveholdings, and buggy whip stocks were shooting up for a long time, they must still be great investments.
- rufusroflpunch 4y ago
  Bitcoin isn't a stock. It has no counter party risk and doesn't offer returns. It is a monetary good. It's akin to holding a commodity metal like gold or silver, but it has comparative advantage in that it has no competing utility, it is only useful as a money.
  - midislack 4y ago
    It's not a monetary good. It's a virtual scrip with mathematical basis.
hiq 4y ago
> Bitcoin has a four year halving cycle This misses the whole picture which is about both supply and demand, and mining is only one side of the equation. You do mention demand afterwards, but > Bitcoin's network effects have already likely reached "runaway" status, so Bitcoin will continue to grow as the network effect speeds up exponentially. is debatable to say the least. Is there any legal niche group that would use it for at least 50% of their transactions? News articles about the experiment in El Salvador seem to indicate that people still prefer to use cash (USD). > The total addressable market of Bitcoin is all monetary value on earth, so in the hundreds of trillions, probably. Not sure how this is relevant, in practice 99% of the world can use the USD one way or another, but that doesn't mean it'll ever reach this point. > Its volatility will continue decreasing as it grows to address more of the T.A.M. of global monetary value. Has it even begun? I haven't computed anything myself, but whenever I look for sources I end up with figures that contradict this claim, e.g.: https://www.buybitcoinworldwide.com/volatility-index/ https://www.buybitcoinworldwide.com/volatility-index/ If you look at the past 7 years, it doesn't look like it has gone down. I had seen tables with yearly volatility averages (or whatever the measure was) claiming the same. Do you have a better source than this?
- rufusroflpunch 4y ago
  > This misses the whole picture which is about both supply and demand, and mining is only one side of the equation. Of course, I just pointed out that price action has historically gone in four-years waves driven by halving cycles. This is clear in the charts. That's why the 200WMA is particularly meaningful in the Bitcoin world. > is debatable to say the least. Is there any legal niche group that would use it for at least 50% of their transactions? News articles about the experiment in El Salvador seem to indicate that people still prefer to use cash (USD). No question, I would be surprised if anyone is using Bitcoin for much of anything but remittences in El Salvador (right now). It will probably be a while yet before we shift into the medium of exchange phase. > Not sure how this is relevant I think it's relevant because network effects generally means money wants to be a monopoly good. Money is more useful if more people use it. Gold, guilder, pound, dollar; the world trends toward one monetary standard, one unit of account. Unlike the fiat reserve currencies since gold, Bitcoin has no counter party risk. Unless something BREAKS the network effects of Bitcoin somehow, I don't see anything stopping it from becoming the dominant monetary good at some point in the future. What do you think will break the network effects of Bitcoin? > If you look at the past 7 years, it doesn't look like it has gone down No, I will admit I'm operating on my gut here. Bitcoin is like the reserve asset of the cryptocurrency world. The crypto market is very much the Wild West still. Crypto trading happens on insane leverage, and is highly correlated with tech stocks and such. But small countries and institutions are just finally starting to get involved. They're not going to be degenerate traders, they're going to be holders. As the institutions and sovereign wealth funds start to pile into crypto, they're going to want to choose the most secure and stable good in the space to hold for the long term, which is Bitcoin. It only makes sense to me that volatility will decrease with time.
  - hiq 4y ago
    > What do you think will break the network effects of Bitcoin? Which network effects are you referring to exactly? What does BTC have that the RMB or USD don't have? Or do you mean that having no counter party risk is a network effect in itself? I'm not sure I follow. Why would country A supplying country B with something it really wants accept a contract denominated in a currency other than the one of their choosing? Why would they choose a volatile currency they don't even control? I feel that the network effects are playing in favor of the dominant currencies. By definition, network effects only exist once there's an actual network, and it seems we agree that BTC doesn't have one comparable to e.g. USD yet. > It only makes sense to me that volatility will decrease with time. So you think it will start decreasing this year? 1. as I pointed out, numbers still don't show a decrease 2. lack of regulation means it's prone to market manipulation, with some parties playing simultaneous roles to an extent which would be forbidden in a regulated market. These manipulations tend to increase volatility (you don't make much money if the price remains the price, but you can make a lot if you have an idea of where you'll send the prices) In turn, that means that: > As the institutions and sovereign wealth funds start to pile into crypto, they're going to want to choose the most secure and stable good in the space to hold for the long term is not necessarily true. Elon Musk can send BTC either way with a simple tweet. Why would big players buy and hold when they can benefit from the volatility they themselves generate and make a quick buck instead? 3. BTC hasn't gone through a crisis yet. As you wrote, it seems to be correlated with tech (risky) stocks, with higher swings, either way. I'd be surprised if that changes during a crisis.

midislack 4y ago

>So as long as your time horizon is 4+ years, it's the best savings technology you could ask for. My US Hay, Confederated Slaveholdings, and buggy whip stocks were shooting up for a long time, they must still be great investments.

rufusroflpunch 4y ago
Bitcoin isn't a stock. It has no counter party risk and doesn't offer returns. It is a monetary good. It's akin to holding a commodity metal like gold or silver, but it has comparative advantage in that it has no competing utility, it is only useful as a money.
- midislack 4y ago
  It's not a monetary good. It's a virtual scrip with mathematical basis.

hiq 4y ago

> Bitcoin has a four year halving cycle This misses the whole picture which is about both supply and demand, and mining is only one side of the equation. You do mention demand afterwards, but > Bitcoin's network effects have already likely reached "runaway" status, so Bitcoin will continue to grow as the network effect speeds up exponentially. is debatable to say the least. Is there any legal niche group that would use it for at least 50% of their transactions? News articles about the experiment in El Salvador seem to indicate that people still prefer to use cash (USD). > The total addressable market of Bitcoin is all monetary value on earth, so in the hundreds of trillions, probably. Not sure how this is relevant, in practice 99% of the world can use the USD one way or another, but that doesn't mean it'll ever reach this point. > Its volatility will continue decreasing as it grows to address more of the T.A.M. of global monetary value. Has it even begun? I haven't computed anything myself, but whenever I look for sources I end up with figures that contradict this claim, e.g.: https://www.buybitcoinworldwide.com/volatility-index/ https://www.buybitcoinworldwide.com/volatility-index/ If you look at the past 7 years, it doesn't look like it has gone down. I had seen tables with yearly volatility averages (or whatever the measure was) claiming the same. Do you have a better source than this?

rufusroflpunch 4y ago
> This misses the whole picture which is about both supply and demand, and mining is only one side of the equation. Of course, I just pointed out that price action has historically gone in four-years waves driven by halving cycles. This is clear in the charts. That's why the 200WMA is particularly meaningful in the Bitcoin world. > is debatable to say the least. Is there any legal niche group that would use it for at least 50% of their transactions? News articles about the experiment in El Salvador seem to indicate that people still prefer to use cash (USD). No question, I would be surprised if anyone is using Bitcoin for much of anything but remittences in El Salvador (right now). It will probably be a while yet before we shift into the medium of exchange phase. > Not sure how this is relevant I think it's relevant because network effects generally means money wants to be a monopoly good. Money is more useful if more people use it. Gold, guilder, pound, dollar; the world trends toward one monetary standard, one unit of account. Unlike the fiat reserve currencies since gold, Bitcoin has no counter party risk. Unless something BREAKS the network effects of Bitcoin somehow, I don't see anything stopping it from becoming the dominant monetary good at some point in the future. What do you think will break the network effects of Bitcoin? > If you look at the past 7 years, it doesn't look like it has gone down No, I will admit I'm operating on my gut here. Bitcoin is like the reserve asset of the cryptocurrency world. The crypto market is very much the Wild West still. Crypto trading happens on insane leverage, and is highly correlated with tech stocks and such. But small countries and institutions are just finally starting to get involved. They're not going to be degenerate traders, they're going to be holders. As the institutions and sovereign wealth funds start to pile into crypto, they're going to want to choose the most secure and stable good in the space to hold for the long term, which is Bitcoin. It only makes sense to me that volatility will decrease with time.
- hiq 4y ago
  > What do you think will break the network effects of Bitcoin? Which network effects are you referring to exactly? What does BTC have that the RMB or USD don't have? Or do you mean that having no counter party risk is a network effect in itself? I'm not sure I follow. Why would country A supplying country B with something it really wants accept a contract denominated in a currency other than the one of their choosing? Why would they choose a volatile currency they don't even control? I feel that the network effects are playing in favor of the dominant currencies. By definition, network effects only exist once there's an actual network, and it seems we agree that BTC doesn't have one comparable to e.g. USD yet. > It only makes sense to me that volatility will decrease with time. So you think it will start decreasing this year? 1. as I pointed out, numbers still don't show a decrease 2. lack of regulation means it's prone to market manipulation, with some parties playing simultaneous roles to an extent which would be forbidden in a regulated market. These manipulations tend to increase volatility (you don't make much money if the price remains the price, but you can make a lot if you have an idea of where you'll send the prices) In turn, that means that: > As the institutions and sovereign wealth funds start to pile into crypto, they're going to want to choose the most secure and stable good in the space to hold for the long term is not necessarily true. Elon Musk can send BTC either way with a simple tweet. Why would big players buy and hold when they can benefit from the volatility they themselves generate and make a quick buck instead? 3. BTC hasn't gone through a crisis yet. As you wrote, it seems to be correlated with tech (risky) stocks, with higher swings, either way. I'd be surprised if that changes during a crisis.