Both the investors and government understand the store of value of oil and gold. Many countries have kept gold as the standard for their monetary system for a period of time. Some of them are also considering oil in this domain. However, the advent of Bitcoin has changed the scenario in a big way. The term gold standard refers to the monetary system in a good value with a great piece of people, and the money is assured about the same by the government. The methods are now becoming successful in fighting issues like deflation and inflation. It is very much restricted to many more governments, and they can freely generate the best kind of cash. At the same time, we see oil has come up like a store of value, and the shortage makes it a great store of value. Now, let us check how Bitcoin will replace oil to gain some higher store of value. If you are interested in bitcoin trading, visit https://ethereum-trader.app/ to acquire an utter guide to crypto trading.
The Current Global Market
The current global market for oil seems to be on the lower side, which is caused due to the war between Ukraine and Russia. It has the oil prices that help raise the nations swapping via fiat money for oil. It comes to ensure that the value remains sustained with time. The next significant asset that seemed to have carried the store of value remains in the cyber age. The civilians coming from Ukraine and even Russia are now seen swapping their domestic fiat currency for Bitcoin and other digital coins to hedge against the quick inflation due to the war. Bitcoin can bring in gold and oil, acting as a store of value.
As per recent GS reports, we see a distinct possibility about Bitcoin that remains away from the gold share in the market this year. On comparing with digital assets, we see the former scoring its point. The market of Bitcoin is 700 Billion USD if you look at its market cap, and it is owned by the same. You can find the coin worth 2.6 T USD, with the gold coming along with a considerable investment. Therefore, we see a good amount of share in terms of the store of value market. In the long list of predictions, we can see many more global investment giants are now moving ahead with Bitcoin emerging as an asset class that becomes big in the coming time. Despite the equity market going up, we see conflict between different nations, and Bitcoin has been on the rise overall.
Why is Bitcoin So Attractive for the Oil Industry?
Bitcoin has come up like a store of value compared with oil or even gold. It comes with a durability element with a significant amount of scarcity. The total supply of Bitcoin comes with a market cap of around 21M, and it helps in gaining suitable measures. At the same time, Bitcoin acts like a decentralized digital asset, which works like a central bank or government as a global network of miners and nodes. It helps in adding some of the best measures of privacy added to the BTC users that work with greater security.
- Scarcity – Oil is scarce, and its extraction is also a costly affair with complex labour. Thus gaining its supply is not that simple. However, as we see Bitcoin becoming scarce compared to oil and gold, Bitcoin has its limit up to 21M, and it will take another 120 years to see the mining complete for it.
- Fungibility – This is a term known as a property of becoming an interchangeable trait, and it remains a good store value. Oil is generally a fungible element, and it can carry too many impurities, which further help in carrying too many impurities that can further help reduce the fungibility. Unfortunately, it is not that simple to test the purity element of any individual that comes without any high-end tools.
- Divisibility – The next store of value that is not often divided further in a minor time act allows more precise value transfer. The oil lacks all the property, and it can help make things work. The next thing worth checking is storage, and when we compare the coins to any other stores, we see oil storage remains a crucial factor. Storing oil needs a vast physical space, and we do not see any flash drives.