Store of value

Economists describe money by three functions: medium of exchange, unit of account and store of value. An asset fulfils the last when people can save it today and expect to buy roughly as much or more with it in the future. Gold, property and, in stable economies, government bonds are traditional examples; fiat currencies lose some purchasing power each year through inflation.

Bitcoin's supporters argue that its fixed supply and resistance to confiscation make it a long-term store of value, even if it is rarely used for everyday payments. In countries with high inflation or capital controls, people use both bitcoin and dollar stablecoins to preserve savings. Most altcoins make weaker claims, since their supply schedules and governance can change.

Short-term volatility is the main objection: an asset that can lose half its value in months is a poor store of value for someone who needs the money soon. Supporters reply that the relevant horizon is years, not weeks. Stablecoins hold value in dollar terms but inherit the inflation of the currency they track and depend on their issuer.