Store of Value

The ability of an asset to avoid depreciation over an extended period of time is referred to as a store of value. Therefore, an asset's worth must either remain stable or grow through time in order to qualify as a store of value—it must never decrease. A good store of value will allow its owner to sell or swap it at a later time for an amount equal to or greater than what they paid for it initially. The market worth or purchasing power (monetary value) of the asset is typically tied to this value. However, in some circumstances, it might also be connected to the asset's liquidity (i.e., how simple it is to purchase and sell). Most fiat currencies have a long history of diminishing buying power brought on by inflation (mostly as a result of a sharp rise in the amount of that currency in circulation). But despite the negative effects of inflation, many economists view money as the classic example of a store of value. The cause of such can be because of its slowly fluctuating purchasing power. Additionally, money is arguably the most liquid financial instrument available right now. However, it is debatable whether or not money is a good store of value. primarily because depreciation is continuously being caused by inflation and hyperinflation. Due to their scarcity (restricted supply), gold, silver, and other precious metals are also regarded as reliable stores of value. Additionally, they can be kept in storage for very long times without suffering physical harm. Digital money cannot be duplicated or used twice (double spending).