Bitcoin (BTC) Not a “Store of Value”, Analysts Believe

Bitcoin (BTC) price movements in the past days showed increased volatility, raising doubts that the coin served as a store of value.

Bitcoin (BTC)is still too volatile to be a store of value, analysts believe. After the leading coin went through a boom-and-bust abbreviated cycle on Tuesday, there were signs that the asset could not offset the risk of other investments.

BTC moved up from the $11,500 range,peaking above $12,300, only to erase most of the gains overnight, returning to $11,500. The recent BTC price spike followed a slide on the stock markets. Additionally, US accusations against China of currency manipulation may have boosted a drive to digital assets.

However, BTC is still too volatile to protect value. In the past, BTC has moved on with a relatively stagnant price for years. It was possible, at one point, to use BTC as a store of value. But now, BTC can move as much as $1,000 in a single day, making value stability a highly uncertain affair. Additionally, from peak prices in 2017 to the bottom of the bear market, BTC slid more than 80%.

Marcus Swanepoel, CEO the Luno project, noted that some investors move a part of their funds into BTC in cases of traditional market volatility. However, the effects of this move may be highly variable.

“If you’re wrong, you’re not losing lots of money, but if you’re right we are talking outsized returns,” Swanepoel said, cited by Reuters.

BTC is currently in the spotlight again, as the most potentially gainful coin on the entire market. The dominance of BTC in terms of market capitalization reached more than 68.8%, the highest level since April 2017. In the past years, altcoins were at one point booming, and Ethereum (ETH) even threatened to become more valuable than BTC.

However, none of these events materialized, and BTC remains the king of the crypto market. With a boost to liquidity in 2019 after the amount of Tether (USDT) doubled in the first half of the year, BTC trading is offering a volatile experience, with a big potential upside.

Neither the author nor the publication assumes any responsibility or liability for any investments, profits, or losses made as a result of this information. Cryptocurrency trading and investing are risky propositions, and market participants are advised to always conduct thorough research.