If you’ve been a fan of CriptoTendencia for a while, you’re probably familiar with the term “asset book value”. But if you are just starting to integrate into the crypto world, it is possible that the use of this term in our articles will confuse you a little. This is why we have decided to dedicate this edition of ABC Crypto to talk about the assets, book value, and why the Bitcoin is one of them.
Contents
The uncertainty in our world
Very well, but before you understand why the BTC is an asset, a store of value. We must first understand what it means to be an active reserve of value. What other assets book value there is in the world. And above all, that the utility have. And to do this we must start from a basic premise is very simple: The world is uncertain. About this have written books for several of the main authors of the history of mankind. But we ourselves, after some years in this world, we can convince ourselves that this phrase has all the reason. One day the world can seem like the site is more peaceful in the world, and the following have firestorms in Australia, and bombings and threats in Iraq. And this also manifests itself in our personal lives. Therefore, even in the quieter moments of our life, problems may arise that put all of head. For this reason, we must always be prepared for the unexpected. So that from one day to the other we need to make a disbursement to repair a pipe in our home. Or that the global financial market collapse, and with it the value of all your savings. And that’s where the assets book value.
What is an asset store of value?
Therefore, although it may not appear so, the coins and their value are as unstable as crucial to our life. And if not, we can ask to be a resident of Argentina or Venezuela. Those who in recent times have witnessed, powerless, as their money loses more and more of its value. Thus, it is logical that they consider alternative methods to protect the value of our savings, different to paper currency traditional. Which always runs the risk of losing to inflation. To which we have recourse to assets book value, which are, in simple terms, financial assets whose value over time is so stable, and its relationship with the ups and downs of the financial market so small, that we can transform our savings in this asset to ensure that they retain their value in time. So, a saver in a country like Venezuela, you know that your hard earned money in Bolivars will be worth less than half the following week. You may decide to use this money to buy an asset such as gold. The value of the time remains stable. Or an investor worried about a possible collapse of the world economy in 2020. You could use your money to purchase a property, also considered safe assets. There is therefore a substantial range of assets to choose to protect our money. Including gold, silver, real estate and the u.s. dollar, which, although it is a fiat currency, it is considered to be quite stable. Bitcoin as a reserve asset of value
Bitcoin an asset book value
In summary, we can say, then, that the active reserve of value they attempt to provide certainty to investors in times of uncertainty. Or what is the same, those who invest in this type of assets, expect that the price of the same is not affected in front of a collapse in the markets. And this happens to be one of the main features of Bitcoin. The price of which, despite the volatility that the enemies of the cryptocurrencies always throw to him in face. Has a relationship that is not directly proportional with the performance of the financial markets. That is to say, although the market colapses, the Bitcoin will not. What is vital to understand why when the global uncertainty is higher. The behavior of the Bitcoin strongly resembles that of the gold market. Since the private capital, foreseeing potential turbulence in the global market. They run to take refuge in assets that are deemed not to fall if the economy does in general. And among these, is the Bitcoin. This has led many people to believe that the fate of Bitcoin is to become the main asset reserve of value. However, to achieve this, the Bitcoin will still lack an important way to go. Especially to reach the desired mass, and with it the stability of the market. Despite which, and from already, the BTC has a solid reputation of active reserve of value that has not done more than increase in recent times. The following two tabs change content below. Student of International Studies, interested in issues of economy and international politics. Passionate about the progress of the Fourth Industrial Revolution in general and the cryptocurrencies in particular.