People call bitcoin a store of value for a few reasons:
1. It's deflationary: there's a finite amount and as more coins are mined the cost of mining increases.
2. It's expensive and slow to trade: It's not viable for general purchases therefore it's main use is not in purchasing.
3. It's seen as a gateway cryptocurrency: Because it's the most abundant and accessible cryptocurrency, people often keep bitcoins in storage and then use them to buy other cryptocurrencies.
1. It's deflationary: there's a finite amount and as more coins are mined the cost of mining increases.
2. It's expensive and slow to trade: It's not viable for general purchases therefore it's main use is not in purchasing.
3. It's seen as a gateway cryptocurrency: Because it's the most abundant and accessible cryptocurrency, people often keep bitcoins in storage and then use them to buy other cryptocurrencies.
You can call it a store of value for whatever reason you choose. That doesn't mean it's a store of value. The definition of a store of value is: "A store of value is any commodity or asset that would normally retain purchasing power into the future and is the function of the asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved".
Bitcoin is now down to 27.5k from a high of around 60k just a few months ago.
This is a good definition.
But you are taking an extra leap by defining it in terms of months, and during the early adoption phase of a brand new technology.
In a previous post, you said " Just because BTC has trended upwards for 10 years or so, doesn't mean it will always go up. 10 years is nothing in financial markets."
So before, 10 years was too short to measure it's worth as a store of value. Now you are saying a change in a matter of months is enough to come to a conclusion about it's worth as a store of value?
Lets apply this definition to the other stores of value. The dollar (NZ and US and whomever's) is consistently declining in value, and that is the stated goal of central banks.
Gold peaked a long time ago in terms of purchasing power.
So are you saying the best stores of value are expected to lose value over time?
Do you think we have found the best ever money already, in fiat currency (which is and undefined amount of paper certificates that used to directly represent gold, but have now had the representation severed, and are instead backed by oil and military power)? Do you think that is the best that human civilisation can do?
Fiat currencies are certainly not a good store of value over time. This is perhaps largely due to central banks adopting positive inflation targeting regimes (i.e. defining price stability as a 1-3% yearly increase in the All Groups CPI). However, you can be certain that a fiat currency, in most scenarios, will not lose 10% of its value within 24 hours. All things considered, the NZD is a fairly stable currency. At least the G10 fiat currencies have been depreciating at a fairly predictable rate over the last 50 years (measured by the CPI, for example).
Not to say I'm a proponent of fiat currencies, but they are a better means of transactions than BTC. Fiat currencies will probably collapse at some point too, and give way to CBDCs, or a 'Bancor-type' supranational currency as proposed by Keynes.
(Disclaimer: this is just my personal opinion)
Not to nit-pick ;) But I assume you mean only the most established and powerful fiat currencies when you say they won't lose 10% in 24 hours? Nearly every fiat currency that has ever existed, has indeed lost more than 10% in 24 hours. Only a handful of the current world leading currencies have yet to do it.
I see the other day Malawi officially announced that their currency was being devalued 25% in one swoop - that one is on its way to its death soon.
So we've agreed that fiat currencies are not good stores of value.
I am claiming that gold is no longer a good store of value.
You are claiming bitcoin will not be a good store of value.
So what exactly is a good store of value? What is left?
Real estate? Lego?