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One purpose I use Bitcoin for is as a store of value. I can't know what the government will do with its currency in the future. But I know what the Bitcoin pro
by danuker 4y ago
One purpose I use Bitcoin for is as a store of value.
I can't know what the government will do with its currency in the future. But I know what the Bitcoin protocol dictates.
Sadly, the supply not being responsive to the demand also means I'll see crashes. But I also see crashes with gold, stocks, and real estate.
- jeffbee 4y agoCompletely normal "store of value" behavior. https://www.google.com/finance/quote/BTC-USD?sa=X&ved=2ahUKEwjO0pruqcb4AhXpJkQIHUuqCQ4Q-fUHegQIDhAX&window=1Y https://www.google.com/finance/quote/BTC-USD?sa=X&ved=2ahUKE...
- jazzyjackson 4y agoclassic fallacy, you've chose a window of time where the arrow points down. there are many other windows of time where the arrow points up. besides value, the operative word is "store", as in, store it another 5 years and see which way the arrow points then.
- jeffbee 4y agoAh yea, the store of value routinely moves 10% in an hour, and I’m the one being fallacious.
- D13Fd 4y agoYou may know what the Bitcoin protocol dictates, but Bitcoin protocol has little to do with its value. It is worth what people will pay for it. You don't know how much or how little people will be willing to pay for it tomorrow, and that number varies rapidly. That's not a property I'd want in a "store of value."
- danuker 4y agoIndeed, demand is the biggest risk in owning crypto assets. Here are what I believe the largest factors that influence demand: - liquidity (depends on, say, GDP and national currency supply) - network effects (it's easier to use Bitcoin if more people are using Bitcoin, because more services and trading partners pop up etc.) - amount of "speculators" - people buying because the price went up recently. They are betting on momentum. - amount of "true believers" - people seeing the value of the protocol, and sticking through crashes or betting on mean reversion.