Noah Smith has some interesting thoughts on Bitcoin as a store of value, both in the long run and the short run. He notes that financial assets face (in equilibrium) a tradeoff between expected return and volatility. In order for markets to be induced to hold a volatile asset, long-term expected returns must be higher. This means that over long time horizons, a relatively volatile asset (such as Bitcoin) may be a better store of value than assets deliberately designed to be non-volatile (such as fiat currency).
Bitcoin as a medium of settlement
Bitcoin as a medium of settlement
Bitcoin as a medium of settlement
Noah Smith has some interesting thoughts on Bitcoin as a store of value, both in the long run and the short run. He notes that financial assets face (in equilibrium) a tradeoff between expected return and volatility. In order for markets to be induced to hold a volatile asset, long-term expected returns must be higher. This means that over long time horizons, a relatively volatile asset (such as Bitcoin) may be a better store of value than assets deliberately designed to be non-volatile (such as fiat currency).