Most people in the crypto community believe that Bitcoin will "only go up" in the long term. Almost everyone thinks that in 5 years we will see more than $100k per $BTC. But it is important to question the assumptions we take for granted. Let's try to explore all aspects of $BTC.

Bitcoin as a savings vehicle (digital gold or gold 2.0)

• *Statement: **As we all know, Bitcoin is designed to have all the properties of "Smart Money", making it a better version of gold.

<aside> ❓ "Smart Money" should be:

• Divisible
• Transferable
• Scarce
• Durable
• Easy to move </aside>

Bitcoin possesses all these properties and is superior in all these respects compared to traditional forms of money like fiat or gold, making it a better store of value.

Let's move on to examples:

• Bitcoin is much more flexible and divisible than gold.

<aside> Counterargument:

• Litecoin, Dogecoin, and thousands of other coins can claim to have similar properties.
• Creating a store of value requires more than programmed properties.
• Since transactions worldwide are conducted in fiat currencies (USD, EUR, GBP, etc.), the narrative of Bitcoin as a store of value only makes sense if its price volatility relative to the dollar decreases. </aside>

Enthusiasts will argue that volatility will decrease over time as the market matures and becomes more efficient. Over time, Bitcoin may reach a level where its volatility decreases so much that it can be considered a good store of value.

| Some even argue that Bitcoin's volatility is a feature, not a bug.

Why Bitcoin's Volatility Is a Feature, Not a Bug

Bitcoin as an inflation hedge

• *Statement: Inflation is often caused by excessive money printing/rapid increase in the money supply, but Bitcoin is not subject to these issues because it has a fixed supply and predetermined tokenomics.

Central governments are printing money like crazy, causing inflation and devaluing fiat currencies. Gold is considered an inflation hedge because it is scarce. Bitcoin enthusiasts believe that $BTC will also become a good inflation hedge because Bitcoin is also scarce. However, in the short term, it has not been a good hedge against inflation, and proponents will argue that this view is shortsighted. Bitcoin is too young, and its value as an inflation hedge deserves to be evaluated over many years, not in the short term.

<aside> Counterargument:

• Bitcoin has not proven itself as an inflation hedge.

@nntaleb has some strong arguments against $BTC that are worth reading if you want to be intellectually honest.

• Scarcity does not mean effectiveness in hedging inflation. </aside>