Store of Value
Ativo que consegue preservar poder de compra ao longo do tempo, podendo ser guardado e trocado no futuro sem perda significativa de valor de mercado.
Key points
- A store of value is an asset that preserves purchasing power over time, able to be held and used in the future without major loss.
- To fulfill this role, an asset needs to be durable, relatively scarce, and widely accepted, characteristics that vary between different options.
- Gold and strong currencies are traditional examples, and part of the market attributes this role to Bitcoin, although its volatility is a subject of debate.
What is a store of value?
A store of value is the function of holding purchasing power for the future. A good example is something you can hold today and exchange for similar goods years from now, without having lost most of its value along the way. It is one of the classic functions of money, alongside serving as a medium of exchange and unit of account.
How it works
To preserve value, an asset usually needs a few qualities: durability, so it does not deteriorate; scarcity, so its supply does not grow to the point of diluting value; and acceptance, so it can be exchanged when needed. Gold has combined these characteristics for centuries, which is why it serves as a historical benchmark for store of value.
Strong fiat currencies also fulfill this role day to day, although inflation erodes part of their purchasing power over time. Assets with a supply limited by rule, such as Bitcoin, are presented by part of the market as a digital store of value, due to their programmed scarcity. The trade-off is high volatility, which makes the role harder in the short term.
Stablecoins occupy an intermediate position: they seek to preserve value relative to a reference currency, which makes them useful for holding purchasing power in dollars digitally, depending on the soundness of their backing.
Why it matters
For those who want to protect resources from the devaluation of the local currency, choosing a store of value is central. An expat who earns in a strong currency can keep part of their resources in a dollar stablecoin to preserve purchasing power, and convert to the local currency only when they need to spend.
Limitations
No asset is a perfect store of value: gold generates no income and has storage costs, fiat currencies lose out to inflation, and fixed-supply crypto fluctuates heavily in the short term. The role of store of value depends on context and time horizon, and attributing it to a specific asset involves judgment, not an absolute truth.