The whole point of currency is to use it. If you are buying a currency to hold on to it, then it is a terrible currency and there is a disincentive to use it as one, thus making it useful only for speculation. I know that there was a pivot when people realized Bitcoin and Ether are not practical for their purported use as currencies, where they are now claimed to 'hold value', but that is ridiculous. They were designed to be currencies and they suck at it. You can make up any reason you want, but if you want a cryptocurrency that has value as a currency then in my view Monero is an example of one, because it has a valued use case.
ON the international currency market, one traditional role of the US dollar is exactly "store value". You trade your currencies on the FX market during your day, and comes close to "close of your trading", you exchange all your positions for US dollars, to keep in store for your quiet period. Comes the following day, you trade out your dollars for other currencies. Then the cycle continues.
Does this mean that the US dollar is a terrible currency? No. If another currency meets the same stability criterion, it can (and probably is) used as a short-to-medium term value store.
I don't really see any crypto-currency work well, they're thinly traded, so there's a lot of inherent volatility in the pricing. It is also getting increasingly harder to exchange crypto-currencies for more traditional currencies.
> ON the international currency market, one traditional role of the US dollar is exactly "store value". You trade your currencies on the FX market during your day, and comes close to "close of your trading", you exchange all your positions for US dollars, to keep in store for your quiet period.
Come again? The international currency market doesn’t really close overnight, and the people who store value in USD are generally Americans or other people or entities who generally store value as USD.
And that latter part is the whole point. When you save up for retirement, or plan your business, or prepare a balance sheet, or plan for a college education, everything is denominated in dollars (or your local currency).
If you want to store money for any future use, you want an asset that has a somewhat predictable return relative to the dollar. If you are a drug dealer who collected $1M (in USD or its equivalent in Bitcoin, Monero, casino chips, whatever), you may well launder or mix it through something else, but your goal is to end up with approximately $1M for when you want to buy more wholesale drugs, pay employees, buy a fancy yacht, etc. Storing $1M as Monero is making a huge bet that it will still be worth $1M when it’s needed.
> ON the international currency market, one traditional role of the US dollar is exactly "store value".
I do know that 'store of value' is the term I used, but it is in reference to the people who hold Bitcoins in expectation of rising price, and the fact that they would claim it 'stores value' while being extremely volitile is indicative of their lack of understanding or their lack of honesty in representing their motives.
People who shelter their dollars overnight are most likely not expecting a return on it.
> The whole point of currency is to use it. If you are buying a currency to hold on to it, then it is a terrible currency and there is a disincentive to use it as one, thus making it useful only for speculation.
Tell that to anyone who saves money for any purpose. They may not literally hold USD in their private Fed account or as cash under a pillow, but they are nonetheless storing dollars (as bonds, money markets, savings accounts, etc).
I think you misunderstood my point. Holding on to currency and expecting it to increase in value is terrible for the economy because it stops economic activity. People don't buy dollars because they will be worth more later -- they buy them because if they need to they can use them. Also, bonds are not dollars, they are bonds.
