Store of Value

Every crypto is a store of value, while a few are better than the others depending upon their token economics. But what does it mean when we call a crypto asset a store of value? Any asset that maintains its value without depreciating is defined as a store of value. It can be any asset such as precious metals, paper notes, or digital assets like crypto. However, any asset that does not depreciate with time can be called a store of value.

Any currency that transfers value across space and time generally attracts investors. Gold, for example, was found billions of years later from the Earth’s crust, and now sits firmly in the vaults of the banks. Art also has an appreciating value but needs a lot of maintenance. However, despite these, art and gold both are seen as stores of value. Government fiat money, on the other hand, sees depreciation over time due to inflation and other economic factors. Similarly, crypto assets also face such economic troubles, but just like their fiat counterparts, have the ability to provide monetary benefits to its holders and are therefore, perceived as a store of value.