Bitcoin Increasingly Been Used As A Store Of Value Asset Given the Latest Hodler Metrics

  • Bitcoin (BTC) is increasingly being used as a store-of-value (SoV), instead of as a means of payment, according to reports.
  • Some analysts believe BTC's role is mainly to function as a medium-of-exchange (MoE).

Investors have traditionally viewed gold, silver, and other precious metals as the go-to source of stability when the equities markets destabilize. However, the arrival of digital currencies, like Bitcoin (BTC), has ignited debates as to whether or not precious metals are still relevant tools of stability during times of market turmoil.

Bitcoin Investing Has Been Quite Profitable

Even though there has been a lot of talks about volatility, buying Bitcoin in any of the 122 out of 125 months would have landed you in profit.

Peter Boockvar, the chief investment officer at Bleakley Advisory Group and an outspoken critic of Bitcoin, recently explained that he believes BTC is increasingly finding utility as a safe haven investment. He said:

“I watch bitcoin as a signal, as an indicator, not because I want to own it. Over the last couple weeks, we’ve seen this sharp rise in bitcoin, and to me, that was saying something in terms of what markets were thinking about what the Fed was going to do [and about] the turmoil created by the threatened tariffs.”

Earlier mentioned Rhythm added:

“60% of all bitcoins have not moved in one year. That’s 10.5 million bitcoin being held as a store of value for the last 12 months. Bank accounts will become as rare as landlines are today.”

Looking At The History Of Gold

The 1970s are a dividing line for gold. Before 1971, the U.S. dollar was hard-backed by gold, and gold’s value was effectively vouchsafed by the full faith and credit of our government. When Richard Nixon took the U.S. off of the gold standard in 1971, it set gold loose from its moorings. What followed was a period of huge volatility, as gold fought to establish itself as an independent store of wealth.

Bitcoin is following the same path. Bitcoin’s price rose exponentially in its earliest days, and that growth is slowing over time. Volatility, while still high, has declined markedly, and will likely fall further as derivatives and market-making activity increase.

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