On
days
like
this,
it’s
easy
to
scoff
at
bitcoin
(BTC)
–
specifically,
the
claim
that
the
original
cryptocurrency
is
a
store
of
value,
the
digital
equivalent
of
gold.
BTC
tumbled
along
with
the
broader
financial
markets
Monday
and
briefly
dipped
below
$50,000,
its
lowest
level
since
February,
before
retracing
some
of
its
losses.
Early
afternoon
New
York
time,
the
asset
was
off
9%
on
a
24-hour
basis,
at
$53,387.67.
For
skeptics,
bitcoin’s
volatility
was
an
invitation
to
echo
an
old
Billy
Crystal
comedy
routine:
“Where’s
your
messiah
now?“
“The
Bitcoin
‘store
of
value’
thesis
is
getting
blown
up
right
now,”
Bloomberg
columnist
Joe
Weisenthal
crowed
on
X
(formerly
Twitter).
“Bitcoin
doesn’t
look
like
The
New
Gold.
It
looks
like
3
tech
stocks
in
a
trenchcoat.”
But
there’s
a
more
nuanced
view
on
this
question
that
requires
zooming
out
the
figurative
lens.
“We
shouldn’t
confuse
store-of-value
assets
with
flight-to-quality
assets,”
said
my
colleague
Andy
Baehr,
head
of
product
at
CoinDesk
Indices.
“The
former
is
a
long-term
expectations
property
and
the
latter
is
a
flows
and
fast
market
property.”
The
“long
term”
part
is
key.
On
a
day
like
Monday,
with
the
Nikkei
falling
12%
and
the
vibe
inviting
comparisons
to
1987’s
“Black
Monday,”
U.S.
Treasury
bonds
“tend
to
become
this
flight-to-quality
asset
that
everybody
zooms
into,”
Baehr
said.
Treasury
yields,
which
move
in
the
opposite
direction
as
prices,
are
at
their
lowest
levels
since
January.
Bitcoin
clearly
doesn’t
enjoy
flight-to-quality
status.
“It’s
still
undoubtedly
a
volatile,
in
many
cases
speculative,
in
many
cases
levered,
in
many
cases
traded
asset,”
Baehr
said.
“But
its
properties
hold
promise
that,
over
time,
its
scarcity,
its
portability,
and
its
lack
of
attachment
to
any
government
or
corporation’s
policies
make
it
a
really
interesting
asset
to
consider
as
a
store
of
value.”
Investors
who
look
at
bitcoin
this
way
are
thinking
of
it
not
as
a
safe
haven
from
day-to-day
market
volatility,
but
rather
as
an
insurance
policy
against
the
steady
erosion
of
the
greenback’s
purchasing
power.
The
supply
of
bitcoin
is
predictable
and
fixed
at
21
million,
immune
from
the
whims
of
policy
makers.
“Those
who
hold
it
for
long
periods
of
time,
especially
those
who
have
concerns
about
…
the
national
debt,
central
bank
policy,
all
of
these
things
…
feel
as
if
it’s
not
so
much
bitcoin
going
up
[that
matters]
but
its
denominator
declining
in
value,”
Baehr
said.
Counterintuitive
though
it
may
seem,
it
is
possible
for
something
to
be
both
a
risk
asset
and
a
store
of
value
at
the
same
time,
he
added.
“People
who
use
bitcoin
as
a
store
of
value
are
not
unaware
of
its
volatility.”
Arthur
Breitman,
a
co-founder
of
the
Tezos
blockchain
protocol
and
a
crypto
O.G.,
noted
that
bitcoin’s
resistance
to
confiscation
makes
it
a
“store
of
value”
in
another
sense.
“Bitcoin
is
a
good
store
of
value
if
…
bank
accounts
are
being
seized,”
he
wrote
in
a
reply
to
Weisenthal
on
X.
“It’s
contextual.”
In
a
separate
reply
to
Weisenthal,
Dan
McArdle,
co-founder
of
crypto
data
service
Messari,
quote-tweeted
an
old
post
in
which
he
described
how
he
expected
bitcoin
to
perform
during
different
types
of
calamities.
It
should
“selloff
under
liquidity-crisis
scenarios,
ramp
on
sovereign-debt/fiat-confidence
crises,”
McArdle
wrote
in
2018.
Monday
was
an
example
of
the
former.
As
for
a
more
time-tested
store
of
value,
the
price
of
gold
was
down
about
1%
Monday
afternoon.
“It’s
unfair
to
judge
bitcoin
against
something
that’s
thousands
of
years
old
as
a
store
of
value
when
it’s
still
in
its
infancy,”
said
Alex
Thorn,
head
of
firmwide
research
at
crypto
investment
bank
Galaxy
Digital,
referring
to
comparisons
to
gold.
Buying
bitcoin
is
a
“venture-like
bet
on
its
future
as
a
store
of
value,”
he
said.
“Bitcoin
is
still
becoming
adopted.
That’s
why
it
has
both
volatility
and
growth
potential.”