No. of Recommendations: 3
I think it is very irrational to call something a "store of value" when it has multiple 25%+ moves in either direction every couple of months. That is literally the complete opposite of a store of value.
It has certainly been volatile, so maybe not for the faint of heart, but new highs come along often enough that it has worked as a store of value for lots of folks. Here is what Gemini, Google's AI chatbot, says when asked to define a store of value:
A store of value is an asset, currency, or commodity that retains its value over time and can be used again in the future. The main purpose of a store of value is to manage risk by maintaining a stable demand for the asset.
Here are some examples of stores of value:
Money
A common store of value that can be invested, stored in a bank, or kept at home.
Precious metals
Gold and silver are examples of precious metals that can be used as a store of value.
Cryptocurrencies
Bitcoin is an example of a cryptocurrency that can be used as a store of value.
Fine wines, classic cars, watches, or art
These items can be good stores of value because their worth usually increases over time.
I guess "over time" is the key qualifier here. One can lose money in precious metals as well by selling at the wrong time. The volatility is much less, granted, but Bitcoin is a much newer asset. I suspect that institutional and sovereign ownership will produce reduced volatility over time.
Cynthia Lummis, a senator from Wyoming and member of the new Senate Republican majority, has announced plans to introduce a bill establishing a federal Bitcoin reserve of 1 million coins. Given Mr. Trump's advocacy, this seems plausible.
