Friday, December 20, 2024

Bitcoin vs. Gold: Store-of-Value Competition

https://preview.redd.it/oqzq5gk1c28e1.jpg?width=785&format=pjpg&auto=webp&s=805e988ef1146f2ebf872281928c210d78101135

The simulation indicates that Bitcoin achieves 100% adoption in the store-of-value market, completely displacing gold under the given conditions:

Key Insights:

  1. Market Shift Boost:
    • The market event at iteration 400, such as regulatory clarity or technological advancements, significantly increased Bitcoin's perceived value as a store of value, accelerating its adoption.
  2. Gold Displacement:
    • Gold's payoff remained static, whereas Bitcoin benefited from dynamic incentives, making it the preferred choice over time.
  3. Tipping Point:
    • Once Bitcoin adoption crossed a critical threshold, network effects further reinforced its dominance, making gold obsolete in the simulation.

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