The Bitcoin Is More Store Of Value Than Ever
All the lies that haters don't tell
The sell-off has started even before the liquidity injections were utterly cut off, as the FED announced a few months ago and before the rate hikes began.
The indiscriminate advance of the markets over the last two years is starting to take its toll, and we are seeing it in the carnage that is taking place in the indices, but especially in growth stocks.
The market behaves like the first time you drive a boat, unlike a car. It takes a few seconds for the ship to turn when you turn. When you feel that it hasn’t turned, you try to turn some more. When you see that the boat reacts and starts to turn, you turn in the opposite direction, but it is too late, and the ship is completely turned.
Around this time, the Bitcoin haters start to emerge, and we keep seeing comments against Bitcoin as a store of value. They all make the same kind of criticism:
“The Bitcoin is closer to 0 than to ATH” True.
“Tthe last month gold has performed better than Bitcoin” True.
“Bitcoin volatility is very high” True.
But all these Bitcoin trolls have a fish memory. You only have to go back a year to see that Bitcoin has outperformed gold, the growth indexes, and even the S&P 500.
Moreover, it is impossible to find two years of negative returns for Bitcoin. However, in 5 years, the comparisons are ridiculous.
Any self-respecting investor will know that the only way to make money is through a long-term view, and there is no doubt that Bitcoin is an excellent option in the face of the persistent inflation we are facing. The highest inflation in the last 40 years.
Undoubtedly it is an asset to buy and take refuge in the long term.
Bitcoin as a currency
It is on everyone’s lips whether Bitcoin could be treated as currency. From my point of view, yes and no. It is an intermediate-term, but it certainly has many more properties to be a currency than the dollar, the euro, and the yen.
Five fundamental pillars have historically characterized every currency:
Scarce. Law of supply and demand. The lower property is, the more value it will have. If money grew on trees, it would lose its weight.
Divisible. Take the euro as an example. Paper money has different denominations: $1, $5, etc.
Fungible. A unit should always have the same value, regardless of the owner. One gram of gold costs the same as another.
Durable. That is, it must remain intact for an extended period. That is why tomatoes could not be money (they decompose).
Intrinsic. Outside of its market price, gold is a precious metal with a specific utility. It means that it has value in its own right.
Bitcoin has demonstrated, unlike gold, that it fulfills all of them.
It maintains its value over time and even exceeds it.
It can be divided and counted. Each unit is subdivided into Satoshis (0.00000001 BTC).
It has a real value based on supply and demand and the number of completed transactions.
It is fungible and durable. Because it is digital, it will not be lost and can not be damaged.
It can be used as a means of payment and is a store of value.
It is secure, anonymous, and immutable. No one can create more Bitcoins (21M), all data is encrypted, and the human factor does not exist.
It is decentralized. No bank, government, or third party “plays” with cryptos. In other words, you can’t change their value, issue them or control them.
In the case of gold, we have that it would not be divisible.
However, in the case of any currency issued by a central bank, we have that it is far from being scarce. 40% of the dollars in circulation have been printed in the last two years. Moreover, FIAT money has no intrinsic value. This money was backed by gold held by a country or a central bank in the past. This is no longer the case today, as central banks only own 40% of the world’s gold.
Bitcoin has suffered all kinds of attacks, from cyber attacks to government regulations. Even so, it has proven to be indestructible.
Perhaps, all these attacks will make it more antifragile and make it an excellent choice in the face of inflation. At this rate in 10 years, $1k today could be worth $484.
On our side, we continue to run an asymmetric portfolio. We have profited from our hedge, monetizing it and contributing to BTC and DeFi at extraordinary prices.