Insights

The Potential of Crypto Currency as a Store of Value.

Prof.Dr. Torsten Dennin / Esther Hanzsch

Currency Token and Coins. Payment Function and Store of Value. The Potential of Crypto Currency as a Store of Value.

Following the spectacular rise in prices of the first cryptocurrency Bitcoin in 2017, the crash and the subsequent "crypto-winter", during which many blockchain pro-jects had to fight to survive, a new chapter in the crypto-cosmos has opened up: We are on the threshold of mass adaptation.

The corona pandemic provides impetus for digitisation and its increased ac-ceptance by individuals, private ventures and public authorities. Proof is given by large technology companies such as MicroStrategy and Paypal by opening up to the cryptocurrency Bitcoin.

In addition to its primal function as a means of payment, another factor has been brought into focus: the function of storing value. The measures taken to limit the negative economic impact of the corona pandemic have sparked a heated debate of professionals on the stability of our monetary system and confidence in money as a store of value. In this paper are shown the advantages and disadvantages of cryptocurrencies as a store of value compared to traditional stores of value such as money, real estate, gold and securities (like bonds or shares). Finally it is pointed out what potential cryptocurrencies hold to establish themselves as an asset class.

To read the full article, please see attached pdf.

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