Is Bitcoin a Store of Value?

Since it was created, Bitcoin's price has been steadily increasing over the years, and it has a followed an upward trend in 2020 and entered a bull market phase. Naturally, there is a huge interest in investing in Bitcoin because the value of the currency is increasing. A lot of investors are not only getting BTC because its price is rising but also because they are perceived as a safe haven asset. So, the question arises, is Bitcoin really a store of value?

What is Bitcoin?

Bitcoin is a virtual cryptocurrency that is not issued or controlled by any financial institution. Bitcoin as a cryptocurrency relied on blockchain technology, a decentralized, peer-to-peer cash system, where the BTC transactions are facilitated. Because this is essentially an independent cryptocurrency from any external influence like financial crises, political tensions, and its value fluctuates based on the interaction of the supply and demand of the market.

So, what Bitcoin and safe-haven assets have in common is that they don't depreciate in value and they are also not affected by the turbulence in financial markets. Hence, when we talk about assets that are a store of value, we actually think of gold, precious stones, silver, and other assets. They are extremely important, especially when there are bad economic conditions like hyperinflation, for example.

Is Bitcoin A Digital Gold?

So, this is why there are analogies where Bitcoin has been dubbed as the next digital gold. Here it should be noted that there is a limited number of BTC to 21 million, so like gold, the supply of BTC is restricted. At present, there are about 18 million already mined BTC.

Hence, the diminishing supply of Bitcoin is one of the factors that make the cryptocurrency a new digital gold, and its bull market phase is compared to a digital gold rush. After the last Bitcoin is mined, there won't be any new BTC, which is why the price is also increasing. Bitcoin is officially a very scarce cryptocurrency.

The demand for BTC is noticeable on online exchange sites where investors are buying BTC, selling BTC for other fiat currencies, or other cryptocurrencies.

Bitcoin Digital is one excellent trading platform that uses advanced AI technology to instantly adapt to market conditions. What's more, you can earn up to $800 in the first 8 hours of trading on the site. It's also great that you have a great overview of your investments on the go, as the platform is available as a mobile app on both iOS and Android platforms.

If you want to create an account, you need to make a deposit of at least $250, and you can trade whenever it's convenient for you. However, it is still a new asset on the market, the cryptocurrency has been around for just over a decade, and it is not considered a long-term asset for storing wealth.

But, due to increased business support and continual institutional interest, this will likely change in the future. In fact, there are well over 15,000 businesses all over the globe that support Bitcoin.

Advantages of Using Bitcoin

The BTC transactions happen almost instantly (the average processing time is about 10 minutes), they're secure, immutable, and your identity remains anonymous on the blockchain network. These are some of the advantages that make Bitcoin an even better version of gold. To put it in a nutshell, Bitcoin is now seen as a good store of value for many retail and institutional investors looking to diversify their portfolios. Moreover, companies are getting involved in the world of cryptocurrencies by accepting payments in BTC and other digital cryptocurrencies.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes