I've been thinking about why people use Bitcoin a bit lately and its long-term potential. It used to be touted as an alternative to fiat currency, and in fact, the future of currency. Now it seems that people are talking about Bitcoin more as a store of value - a place to keep your money safe that is not a bank or an institution. I know a lot of us invest in Bitcoin more for the perceived increase in value; basically, a lot of us want to get rich.
Here's my question: Would you still continue to move your fiat currency to Bitcoin if it topped out at around USD$5000 and you KNEW it would not go higher, but you also KNEW it would not dip in value? Maybe we could assume it would rise with inflation. If this were the case would you be more or less likely to move your money to Bitcoin?
The typical answer would be yes. I mean, at a glance, there would be no more incentives for you to hoard them. Most people hoard them because of the growth potential after all.
But, if Bitcoin truly becomes stable, it would be
even better as a storage of value. It would literally be immune to weakening of local currencies to the dollar, and would be a safe haven for people who are living in countries with unstable economies. It would be even better than just holding US Dollars because it would adjust to inflation. I would probably move all my savings into Bitcoins and keep them there. It's going to be the perfect currency that retains its value and is completely invulnerable to external factors.
Still, though, this is nothing more than a thought exercise. Nothing can be truly and completely stable in a robust economy. If it becomes a stable as fiat though, and nothing more, I'm sure most people would have little inclination to hodl. I know I'd use it like normal money then.