It’s often a common line used by noconiners, why would you buy bitcoin, it has no intrinsic value. Many people try to compare bitcoin to shares, where they value a stock based on fundamental or objective value through technical analysis. The view that shares give tangible equity ownership in a business that also produces dividends is obviously seen as valuable to investors. The comparison then to Bitcoin which produces no income stream by dividends or equity, can be a difficult leap to take for traditional investors. The error is comparing bitcoin and shares. It’s an apples and oranges situation, you’re not actually comparing similar investments. Bitcoin is an asset unlike any seen before, with the potential to lay the foundation of a new global financial system. The closest apple to apples comparison for bitcoin would be with gold. Especially with the narrative growing stronger that bitcoin is gold 2.0, more specifically digital gold. Gold has long been used by investors as a safe haven asset in times of financial turmoil and an inflation hedge. Gold bug and well known nocoiner Peter Schiff has long praised the properties of gold over bitcoin in that gold has been around for thousands of years, used as a medium of exchange (albeit not very well), can be used as an electricity conductor and of course its status with fine jewellery. Crypto Twitter now actually now feel sorry for Peter, he had the opportunity and was first interviewed to get his opinion on btc in 2011 when the price was around USD$20 per bitcoin. Instead of educating himself on the potential of bitcoin, year after year he doubles down on rejecting an allocation in bitcoin, only to see the price continue to rise all while his gold bags barely move.
A false perception exists that bitcoin doesn’t have intrinsic value as there is no underlying asset to back it. Bitcoin has intrinsic value based on several other key factors due to its unique properties based in code and is not reliant on any underlying asset or government to back it. Bitcoin can be used for payments and as a store of value, giving it utility. Further to this, other key properties that give bitcoin intrinsic value are security, scarcity, immutability, decentralised and the fact that it is not correlated to any other asset. As investors are becoming more educated about these fundamental principles, we are seeing a rapid rise in the interest of a bitcoin superannuation allocation in retirement portfolios.