Then Paul Jones uttered the most quoted quote : letter_001 Photo Credit: Chain News 3. Four conditions for assessing the store of value Screenshot - 2020-06-01-pm15_07_46-pm Photo Credit: Bloomberg Global asset market capitalization The picture above shows the total market value of various assets, in order of market value, they are global financial assets (stocks, bonds, etc.), cash, gold, and Bitcoin. Jones emphasized that what assets will be the winners in the next 10 years should be considered, and four criteria should be used to evaluate whether an asset has a "store of value" function, including: Purchasing Power (30%) Credibility (30%) Liquidity (20%)
Ease of Transfer (20%) Measured whatsapp database by the proportion of scores for these four characteristics, the subjective scores of Jones' research group are as follows: Screenshot - 2020-06-01-pm 15_13_50-pm Photo Credit: Bloomberg 1. Purchasing power The report pointed out that when it comes to how to beat inflation, everyone thinks that the answer is some kind of high interest rate financial asset; but in fact, the interest rate of financial assets has not kept up with the speed of inflation. Jones cites Bitcoin as an example, which he sees as a model of “scarcity appreciation,” as well as the world’s largest, easily tradable asset with a known supply cap.
He said: "The total number of bitcoins cannot exceed 21 million, about 18.5 million have been produced, and only 10% are left to be mined. The block reward halving every four years will continue to slow its circulation." Jones was surprised that their research group rated fiat currencies "almost zero." The group thought, since this thing devalues 2% every year due to inflation, why hold it? 2. Credibility Undoubtedly, Bitcoin has the lowest score in this category. Jones believes that Bitcoin is relatively young among the 4 assets. He explained that some people mention that Bitcoin has 60 million users in 200 countries, but this does not make Everyone is heartbroken.