Is Bitcoin a Generation Asset Like Gold?

However, just as in generations past, those items that retain value — real property, gold, silver, gems, or collectible items — have been passed from generation to generation as a way of protecting family inheritance, as well as a hedge against inflation. Such a policy of earning, saving, and passing on such assets may well also include cryptocurrencies that can function as stores of value (SoV).

Bitcoiners don't hodl for themselves.

They hodl for their children. pic.twitter.com/Tq8By4Q4UX

— Kevin Pham (@_Kevin_Pham) January 6, 2019

Value and Liquidity

Though perhaps tongue in cheek in its presentation, the concept above may prove absolutely true. With assets such as gold, silver, real estate and the like, liquidity is a major difficulty. While they may store value for generations to come, those generations must liquidate assets in order to actually spend any of the saved value. On the contrary, while Bitcoin maintains a SoV potential, it also provides immediate liquidity for any venue that accepts it. And, because it is digital, liquidation is literally just a few clicks away from the comfort of a couch. This means that an asset like Bitcoin is easily transferable, savable, and, most importantly, usable.

Inflationary Hedge

Additionally, like other tangible and limited assets, Bitcoin represents a simple hedge against inflation and monetary policies of the government. Ask anyone who lived through the massive inflation in countries like Venezuela, Zimbabwe, or post-WWI Germany, and they will tell you that a liquid independent asset is an amazing feat. The limited supply of Bitcoin and the subsequent scarcity concept prove to be a means of moving wealth out of markets that are subject to regulatory pressures and into a market that is genuinely free and independent. Such assets are rare, to be sure, but the basic premise of Bitcoin, coupled with the general consensus, provides just such a hedge.

Do It For The Children

This coupling of liquidity and hedge potential is the reason that Bitcoin may well be transferred from generation to generation. Many of those who are Bitcoin faithful (affectionately referring to themselves as ‘HODLers’) have substantial stores of the digital currency and are doing just that. One statistic estimates that as much as $50 billion worth of Bitcoin is held in private cold storage wallets, never the see the light of day. Numbers like this may fluctuate based on the relative price of the currency, but the statistic shows that a large amount of already mined Bitcoin has been safely hoarded for a rainy day. Even though the concept of saving for the generation to come has fallen on hard times, the value of Bitcoin, the simple liquidation process, and the potential as an excellent inflationary hedge may make Bitcoin the perfect item to pass on to your kids. [bctt tweet=”Given the state of the USD, a time may come when the last will and testament is made up mostly of private keys and hardware wallets. ” username=”beincrypto”]

Barriers Remain

However, barriers to this type of asset value for Bitcoin remain. Of particular note is the need for much greater levels of mass adoption before Bitcoin carries the same level of asset value as precious metals or gems. Even with the explosive growth of Bitcoin over the past few years, the global market is still incredibly small compared to that of gold or other precious metal commodities. Furthermore, such assets are universally accepted as stores of value, though, of course, they remain far less spendable. Bitcoin maximalists believe that, as values grow and adoption increases, the inevitable reality is just such a store of value scenario. Regardless, with the current level of adoption reached, even the most ardent cryptocurrency naysayer would be forced to concede that Bitcoin is an up-and-coming asset class. Do you think Bitcoin will become the next generational asset like gold or silver? Is the potential for that much consensus impossible? Let us know your thoughts in the comments below!