Bitcoin is just 12 years old, young by the standards of financial assets. One of the biggest questions over those 12 years has been its validity as a store of value.
For years, gold has been a safe haven staple for investors when considering a physical store of value. Gold cannot be duplicated like fiat money and holds immunity from short-term interest rate decisions by the Federal Reserve. However, some cryptocurrency experts posit that Bitcoin could supplant gold as a store of value over time.
Data confirm more smaller investors are looking at Bitcoin as a legitimate store of value.
“The number of addresses holding $100 or more of bitcoin is increasing dramatically. This metric made a new all-time high on October 22, 2020 above 9.74 million and never looked back. As we’re writing this, there are over 13.41 million addresses holding bitcoin,” says Phil Pearlman of Osprey.
Bitcoin as a Long-Term Play
For HODLers and crypto fans alike, the good news is that the adoption trajectory for Bitcoin looks compelling. Looking at the S-curve, which measures adoption of new technologies, Bitcoin is right where it should be according to many market observers.
Issues such as scalability must also be resolved before cryptos gain wider acceptance. Additionally, regulatory hurdles remain, including central banks in some countries outright banning transactions denominated in cryptocurrencies.
“An increasing number of addresses are holding at least $100 worth of bitcoin and the chart above visualizes the strength of the trend. Not only are more addresses holding, but that number is increasing at an accelerating rate,” adds Pearlman.
Adding to the store of value conversation are data suggesting Bitcoin is attracting more long-term investors.
“Velocity is at its lowest level since 2011, incredible given how many more addresses are holding bitcoin and how much easier it has become to buy and sell,” finishes Pearlman. “Low Velocity reflects the fact that people are selling bitcoin less frequently and holding for longer periods of time. People are storing it.”
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.