Store Of Value Defined

The dollar has lost more than 90% of its purchasing power since the 1950s, according to Consumer Price Index data. That’s why investors want a store of value, an asset that holds its worth instead of slipping away the way cash does. A dollar from back then is worth about seven cents today. So what can you put your savings into that keeps its value over time?

What does store of value mean?

Money serves as a medium of exchange for buying and selling, a unit of account for pricing goods, and a store of value for holding wealth you plan to use later.

When you save money, you’re setting it aside for something you’ll need down the road. For most people, that money is in dollars. The real question is whether dollars hold their buying power over the long run, or whether they seem steady because everything around you is priced in dollars, so you never notice the value slipping.

Assets that function as value stores include gold, real estate, government bonds, and fine art. Each qualifies to a different degree depending on how well it maintains purchasing power when economic conditions shift.

What makes a good store of value?

Five criteria determine what qualifies as a good store of value:

Scarcity

A limited supply protects against debasement, which is a drop in value that happens when a lot more of something gets created. Gold has a finite supply. Mining adds only about 3,600 tonnes a year, and the total above-ground stock, roughly 216,000 tonnes, has built up over thousands of years.

Compare this to an asset that doesn’t have like a fiat currency that doesn’t have a fixed supply. This is why the dollar can lose value whenever the government creates more.

Durability

You want something that lasts. Gold doesn’t rust or break down, so a gold coin or bar can sit for hundreds of years and still hold up. Paper money doesn’t have that going for it. The bills wear out, and even the ones that survive lose value to inflation, so your money buys less over time without a single bill ever hitting the shredder.

Portability

Gold packs a lot of value into something small. A one-ounce coin fits in your palm, so it’s easy to carry or tuck away. You can’t take real estate with you anywhere.

Divisibility

You can buy gold in bars, coins, and fractional pieces without losing value by weight. Depending on your budget, you can own a gram or a kilogram.

Broad acceptance

Such stores of value need buyers when you want to convert to cash. Gold has stable demand across every country on earth, in every economic climate. That liquidity is what separates a credible store of value from a niche one.

Here’s how the major asset classes compare:

Criteria	Gold	U.S. dollar	Bitcoin	Real estate	Fine art
Scarcity	Yes (finite supply)	No (printed at will)	Yes (21M cap)	Limited	Limited
Durability	Yes (essentially perpetual)	No (debasement risk)	Yes (digital)	Moderate	Moderate
Portability	Yes	Yes	Yes	No	No
Divisibility	Yes	Yes	Yes	Limited	No
Broad acceptance	Yes (5,000 years)	Yes (for now)	Emerging	Local	Niche

Why the dollar is a poor store of value

The dollar is legal tender in the United States. But legal tender status doesn’t mean an asset stores value well. It means the government declares it acceptable for settling debts.

The Federal Reserve has the authority to expand the money supply without a hard limit. That’s why fiat currency has struggled to store value over long periods. When the supply of a monetary unit grows faster than economic output, purchasing power reduces. That’s inflation, which is why the dollar has declined so much over the years.

A currency’s value depends on factors like interest rates, trade balances, government spending, and the size of the money supply. Those change all the time. Every fiat currency deals with the same forces. Even one that looks stable can lose value over decades if a country keeps spending beyond its means or floods the system with new money.

We’re also seeing growing distrust of the U.S. dollar in general, which we recently talked about on our podcast:

Gold as a store of value: the historical record

Gold has held its value across every major civilization on record, and that long history is why people still trust it today. Reasons why gold is a reliable store of value include:

• Recognized everywhere: Long before central banks existed, merchants settled trades in gold. Egypt, Rome, and societies across Asia and the Americas all measured wealth in it.
• The gold standard: The gold standard concept meant each country’s paper money was backed by a fixed amount of gold, so you could trade your currency in for the actual metal. That tied money to something with a limited supply. The U.S. ended this in 1971 under President Nixon, and the dollar became pure fiat with nothing physical behind it.
• Central banks still buy it: They bought 863 tonnes in 2025 on top of 1,000 tonnes each of the three years before. Governments still treat gold as a reserve they can count on and a way to diversify against overreliance on their nation’s currency or other reserve assets.
• No counterparty risk: Gold doesn’t depend on anyone else to hold its value. There’s no company behind it and no debt to default on. Silver and other precious metals share some of this, but gold’s 5,000+ year record sets it apart.

Drawbacks of gold as a store of value

There are some drawbacks to holding gold as a store of value:

• No income: Gold doesn’t generate income. Unlike interest-bearing assets such as Treasury bonds, certificates of deposit, or dividend stocks, gold pays nothing while you hold it.
• Storage: Since it’s a physical asset, you need somewhere safe to keep it, like a vault or a custodian. That protection comes with ongoing fees.
• Higher tax rate: The IRS treats gold as a collectible, so long-term capital gains are taxed up to 28%. One way to offset this is by holding gold or other metals in a Gold IRA.
• Short-term price swings: Over short timeframes, prices can be volatile. Gold rose about 67% in 2025, but it’s also dropped more than 20% in a single year before. If you’re judging it month to month instead of over decades, those swings can rattle you.

Store of value isn’t the same as spending money

One asset doesn’t have to do all three jobs. A reasonably robust currency can be bad at holding its value over time but still work fine for everyday spending.

The Swiss franc and the Japanese yen hold their value better than most currencies. Even so, they still lose buying power over the years, the way every fiat currency does. None of them hold up over time like gold.

Gold’s job in a portfolio is to hold value, not to be spent. You don’t pay your employees or buy groceries with it. But gold has the longest track record of any asset for helping you hold onto what you’ve already earned. That means you can hold it for years or pass it down to your heirs.

Final thoughts on store of value

If you have savings in cash or cash-equivalent assets, they’re losing purchasing power every year. Gold has been a store of value over 5,000 years of history and every major economic crisis. The dollar has not.

To learn more about store of value and how precious metals fit your portfolio, connect with the Swiss America team today!

Store of value: FAQs

What is a store of value in economics?

A store of value is any asset that holds purchasing power over time so you can retrieve it and use it later.

• Function: It’s one of money’s three core roles, alongside medium of exchange and unit of account.
• Examples: Gold, real estate, government bonds, and stable currencies have all served as stores of value across different economies and time periods.
• Qualifier: An asset qualifies only if its value remains reasonably stable or appreciates over a relevant time horizon. Assets that lose purchasing power faster than inflation reduces it don’t qualify.

Is gold a store of value?

Yes. Gold has held purchasing power across 5,000 years of economic history, through currency collapses, wars, and financial crises.

• Physical asset: Gold is tangible and doesn’t depend on any government’s promises or a counterparty.
• Scarcity: The finite supply of gold means no central bank can debase it by printing more.
• Track record: As of this writing, at ... per ounce, it’s an asset held in reserve by central banks in nearly every major economy.

Is Bitcoin a store of value?

Partly. Bitcoin has a limited supply like gold, but it falls short in other ways that make gold the safer place to hold value for now.

• Limited supply: Bitcoin is capped at 21 million coins, and no one can create more. That scarcity is the strongest argument for it holding value, and it’s the one place it lines up with gold.
• Short, bumpy track record: Bitcoin has only been around since 2009, and in that time prices have swung wildly, sometimes losing half its value in a few months. Gold has held value through every kind of crisis going back thousands of years. Bitcoin hasn’t been around long enough to prove it can do the same.
• It only exists digitally: Bitcoin has no physical form. You’re relying on the network and whoever holds your keys, so if you lose access or get hacked, it’s gone. Physical gold doesn’t carry that risk. You can hold it in your hand.

Is the US dollar a store of value?

Not over the long haul. The dollar works fine for everyday spending, but it’s lost more than 90% of its purchasing power since the 1950’s, and a dollar from back then is worth about seven cents today. That slow erosion is why governments and investors are moving part of their money into gold.

• De-dollarization: Central banks are buying gold at more than double their pre-2022 pace while cutting their dollar reserves. By late 2025, gold passed US Treasuries as the world’s largest reserve asset by value.
• The debasement trade: As governments borrow and print more money, each dollar buys less, so investors move into things that can’t be printed, mainly gold and silver.
• Gold standard talk: Some US states have made gold legal tender again. A full return isn’t likely soon, but the fact that people are discussing it shows how much faith they’re losing in paper money.

What is an example of a store of value?

Gold is the most widely cited example. Other stores of value include real estate, government bonds, fine art, and certain stable currencies.

• Gold: Finite supply, durable, globally liquid, 5,000-year track record.
• Real estate: Limited supply in most markets, but not portable and can be illiquid.
• Treasury bonds: Income-generating and backed by the U.S. government, but subject to inflation risk and dollar depreciation over time.

The information in this post is for informational purposes only and should not be considered tax or legal advice. Please consult with your own tax professionals before making any decisions or taking action based on this information.