For investors seeking positive future returns, Bitcoin offers little reliable reason to expect them. But could it make sense for investors seeking a store of value?
If you want to save something for later, the thing you store it in needs to be reliable. We learn from experience that pockets may not be a reliable store for crackers, just like Bitcoin may not be a reliable store for wealth.
Over the past decade, Bitcoin’s annualized volatility has been nearly five times higher than that of the Russell 3000 Index—76.9% compared to 15.8%. Since its first recorded market price in August 2010, Bitcoin has taken investors on a volatile ride, with 27 peak-to-trough declines exceeding 10%, 10 declines exceeding 30%, and five declines exceeding 70%.
This data suggests Bitcoin is not a reliable way to store value. It is a way to speculate on it. And it could leave investors HODLing a fistful of crumbs.
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