Intrinsic value is a strategy, not a goal. Money must be provably scarce, and intrinsic value is evidence of scarcity, because value only arises from scarcity. I’m not talking about utility. Air has tremendous utility, but the price is very low because there is so much of it. The difference between air and gold is not in their utility but in their scarcity.

Bitcoin is provably rare and provably genuine. That might make it useful as a store of value. But what about substitution? Not only are they not making more apartments in SF, they are not making anything else that one can use instead of an apartment in SF to get what an apartment in SF gives. Why is Bitcoin a better store of value than SomeotherCoin? Anyone can create a blockchain, and anyone can create provably scarce tokens. The alleged advantages of permissionless decentralization are great for criminals and paranoids, but most folks will be perfectly happy with VISACoin. So how “scarce” is Bitcoin relative to the demand for what it offers?

A big difference between a currency and a store of value is the network effect. Everyone needs to use the same currency, but we can use whatever store of value can find a market. Yes, some things are more liquid than others because their brand is widely respected — that’s why the big ETFs trade so easily — but liquidity is a minor concern with respect to a store of value, the purpose of which is not to be traded but saved. Network effects create moats. Where’s BTC’s moat? Crypto is not Highlander.

And then there’s Gresham. The better a store of value something is, the less likely people are to trade it for goods and services. We want to spend a depreciating asset. As participants in a barter economy in which we only eat if others buy what we have to sell, we want money to burn a hole in its owners’ pockets, not line them. That’s why governments, which, at the end of the day are just coordinators of societies’ plus-sum games, must create depreciating currencies. Bitcoin may or may not work as a store of value, but it cannot be both a good store of value AND a currency.

Think of money as the insulated bag you use to bring your ice cream home from the grocery store. It must be a “store of value,” but only to the extent it needs to be, viz., until you can get the ice cream into the real store of value called a “freezer.” We don’t carry goods home in a freezer, and we don’t store them in thermal bags. The idea that something should be both a currency and a store of value is as absurd. And so the idea that something should be a currency because it is a good store of value, or vice versa, makes no sense.