Bitcoin’s Core Utility is a Store of Value & Speculation is the Foundation of it, Explains Analyst

  • Almost nobody uses the Bitcoin network & speculation remains its primary use case
  • But Store of Value is Bitcoin’s core utility, explains analyst Willy Woo
  • Bitcoin is a good SoV for a period 4+ years while gold is for decades and fiat for just months like some altcoins

After Bitcoin rallied hard in May by over 60 percent, a Bloomberg report stated an “Uncomfortable Fact” about the network that “almost nobody uses it.”

Reportedly, hardly anyone is using the world’s largest cryptocurrency for anything beyond speculation. Per the Chainalysis data, only 1.3 percent of economic transactions came from merchants in his first four months of 2019.

“Bitcoin economic activity continues to be dominated by exchange trading. This suggests Bitcoin’s top use case remains speculative, and the mainstream use of Bitcoin for everyday purchases is not yet a reality,”

revealed Kim Grauer, senior economist at Chainalysis.

Speculation remains the primary use of Bitcoin, they say. Are they wrong? Not at all!

The data states that exchanges account for 89.7 percent of all Bitcoin activity between January and April of this year, down from 91.9 percent from all of last year. It is clear the flagship cryptocurrency is dominated by speculators.

The bull cycle of Bitcoin that makes a new all-time high (ATH) on every such cycle is the driving factor behind this.

Would you be spending a particular asset that history and data suggests will provide you returns 4x, 8x or even more in the future? The answer would be no.

Bitcoin is a Good Store of Value for a Period 4+ Years while Gold is for a Decade and Fiat for Just Months

Analyst, Willy Woo explains how Bitcoin’s core utility is that of a “store of value” and speculation is the foundation of SoV. If you buy an asset, the idea is to have someone that buy it off you later at either the same or a higher price, meaning

“you’ve stored value for a period.”

An asset shows the characteristics of a store of value if it maintains its value without depreciating. Metals like gold are a good store of value as they are essentially perpetual.

“In fact the majority of value accrual for all blockchains and coins is from SoV. That’s because utility valuations work out low (MV=PQ) and nobody is really using these chains yet at any kind of scale,”

states Woo.

Giving an example of Ethereum, he shares when 0.05 ETH are bought to pay for ERC20 transactions, it gives Ethereum a valuation of a few bucks only while 50 ETH bought by investors to HODL, Woo explains gives the second largest cryptocurrency a valuation for hundreds of dollars. This means,

“ETH is primarily valued as an SoV, not at all for its utility as a world computer.”

As for the SoV timeframes, Fiat Woo says is good on monthly just like altcoins that can act as a SoV in weekly to monthly timeframes, but “only during bull markets.” However, many haven’t proven their capability as a store of value over a complete bull-bear cycle.

While gold and houses can act as a SoV for HODL over many years, “ideally decades or more,” according to Woo, Bitcoin is good Store of Value for a period of more than 4 years.

Bitcoin’s price is $9,221.46 BTC/USD exchange rate today. The real-time BTC market cap of $169.93 Billion currently ranks #1 with a chart dominance at 62.37%, daily trading volume of $4.33 Billion and live coin value change of BTC -2.23 in the last 24 hours.

Live Bitcoin (BTC) Price:

1 BTC/USD =$9,221.4595 change ~ -2.23%

Coin Market Cap

$169.93 Billion

24 Hour Volume

$4.33 Billion

24 Hour VWAP

$9.37 K

24 Hour Change

$-205.2167

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

AnTy
AnTy
AnTy has been involved in the crypto space full-time for over two years now. Before her blockchain beginnings, she worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

LEAVE A REPLY

Please enter your comment!
Please enter your name here

3,472FansLike
2,795FollowersFollow
4,197FollowersFollow

Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

Libra Association’s Policy Director: Multi-Currency Backed Stablecoin Vision Still on Track

Libra has not abandoned its original vision of launching a multi-currency backed stablecoin, according to the organization's Policy Director, Julien Le Goc. Speaking during...

Coinbase Planning for Stock Market Listing that Could Happen as Early as This Year: Report

US-based cryptocurrency exchange Coinbase Inc. has kicked off its plan for a stock market listing that could come as early as this year. The crypto...

Is It Time for Chainlink (LINK) to Retract or Is There Still A Lot to Fuel This Fire

The 12th largest cryptocurrency by market cap has been hitting new all-time highs almost every day this week. The new peak is $6.53, and...

89% of Hodlers Are Worried About Their Crypto, But Only 23% Have A Plan For After Death: Report

An online research report by "after-life" investment experts firm, Cremation Institute, found out nearly 90% of cryptocurrency investors worry about losing their funds...

Real Risk: Circle-Coinbase Consortium Blacklists Ethereum Address Holding $100k Worth of USDC

The CENTRE consortium formed by Circle and Coinbase has blacklisted an Ethereum address holding $100k worth of USDC stablecoin. The transaction on Etherscan shows that...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today