Store of Value
a means of holding purchasing power over time
A store of value refers to any asset or medium of exchange that maintains its worth over time. It is something that can be easily saved and retrieved to retain its purchasing power in the future. One of the primary functions of traditional money has been to act as a store of value.
Gold, for instance, has been widely recognized as a store of value for centuries. Because it is rare, durable, and does not corrode, it has retained its value through different economic scenarios. Similarly, real estate properties can be considered a store of value as they tend to appreciate in value over a period of time.
In recent years, cryptocurrencies such as Bitcoin have emerged as a digital store of value. Bitcoin has been widely recognized because of its limited supply and decentralized nature, which means that no central authority controls its supply or value. This gives investors a level of assurance that their investment will maintain its value over time.
Overall, a store of value is an important function of an economy. It provides a measure of assurance to investors, and helps them avoid the risks involved in holding liquid assets or stocks.
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