Terms like this one can often be confusing since they can be applied to a broad range of financial markets. For that reason, we will explain what is a store of value in the context of cryptocurrency.
What is a Store of Value?
The term refers to coins that can act as a digital asset. Aside of that, the reason people choose to refer to the term is also that a “store of value” has the potential to preserve and substitute once’s financial value through the acquisition of different, intangible objects.
Store of Value examples
However, in the context of cryptocurrencies, a “store of value” mostly refers to Bitcoin, thanks to its decentralized nature and limited supply.
Many investors are confident that, in the coming years, using Bitcoin as a store of value will not only keep their money safer than when in banks but also increase the potential to increase their value.
The term may also, sometimes, refer to other cryptocurrencies. However, in our opinion, centralized models don’t serve the definition and the purpose of one’s decision to look for a “store of value”.