Since its creation in 2009, Bitcoin has been a subject of debate and analysis in the financial world. One of the most discussed roles is its ability to act as a store of value, an asset that maintains its value over time without depreciating, similar to gold. Therefore, this week we want to analyze with and for you whether Bitcoin is a suitable store of value or not.

Pros:

Digital Scarcity: Bitcoin has a fixed maximum supply of 21 million coins, making it inherently deflationary. This characteristic is fundamental to its argument as a store of value since scarcity can lead to an increase in value as demand grows.

Decentralization: Unlike fiat currencies, Bitcoin is not controlled by any government or institution, making it immune to devaluation from inflationary monetary policies.

Institutional Adoption: In 2024, we have seen an increase in Bitcoin adoption by financial institutions and corporations. For example, Michael Saylor of MicroStrategy has been vocal about Bitcoin reaching a value of $13 million per BTC, which would imply a market capitalization rivaling a significant portion of global wealth.

Resilience in Crises: Bitcoin has shown resilience during banking crises, as observed in posts on X and Coinbase analyses, where Bitcoin behaves like “digital gold,” attracting investors seeking to diversify away from traditional assets.

Cons:

Volatility: Bitcoin’s high volatility is a major argument against its use as a store of value. Investors seek stability, something that Bitcoin has yet to guarantee in the short term.

Regulation and Acceptance: Regulatory uncertainty can affect its adoption and, consequently, its stability as a store of value. Although there have been advances, regulation remains a minefield for cryptocurrencies.

Comparison with Gold: Gold has thousands of years as a store of value, while Bitcoin has just over a decade. This difference in history and general acceptance may make some investors cautious.

Studies and Analyses: A study by Bitwise Asset Management in 2022 suggested that the relationship between Bitcoin and inflation was becoming more complex, indicating that while Bitcoin was initially thought to be a good hedge against inflation, reality has shown a more intricate dynamic.

Conclusion:

Bitcoin presents unique characteristics that position it as a promising candidate to become a digital store of value. However, its volatility and the need for broader adoption and clear regulation are obstacles it still needs to overcome. Meanwhile, its growing acceptance and comparisons to digital gold suggest that, for many, Bitcoin is already an integral part of their long-term investment strategies.