What is a Store of Value?

Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.

You've probably heard the term "store of value", which is usually used in reference to Bitcoin. But what does that actually mean?

Store of value simply means that an asset is seen as one created to park money in.

The most famous store of value is physical gold. People have long invested in it to diversify their portfolio in hopes of steady and relatively stable value increases over time. And there was more to it: throughout history owning gold showed: I am wealthy, and I am powerful.

The idea itself is interesting if you think about it some more: While it finds application in products like electronics and jewelry, the amount of money parked in Gold is much higher than it should be if you just think about its practical use.

You can already see the parallels to Bitcoin. Because it was a proof of concept from the early crypto days, the technology can not keep up with today's demand for speed, transaction volume, and programmability. It does, however, have a place in many investment portfolios with the intention to treat it as a kind of digital gold.

Calling it a store of value though is a pretty large misnomer. Due to the volatility of the crypto markets, Bitcoin's price shoots up and down violently, much more than Gold does.

So: As always, you'll be the judge. Digital gold or simply another speculative asset?

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.