Hoarding is a problem that has been plaguing the Bitcoin sector for quite some time now. Although a lot of people hold Bitcoin as an investment vehicle, those who are not labeled as investors are not spending their funds like they would spend cash. What is it about Bitcoin that makes people want to hold on to it, and should you do too?

Bitcoin Is Precious And Cash is Inflationary

Granted, there are a lot of individuals who hold on to Bitcoin from a savings or investment perspective. It is impossible to deny this cryptocurrency has a lot of potential to increase in value, although that is something people have been saying for several years. Then again, these are still the early days, and there is plenty of room to grow.

But there are other reasons as to why people hoard Bitcoin. Unlike fiat currency, Bitcoin has a fixed supply cap, and a total of 21 million coins will be generated by 2140. Keeping in mind how there will be close to 9 billion people on the planet by then, there is no way for everyone to get one Bitcoin. However, that is a good thing, and given Bitcoin can be divided to 8 places behind the decimal, there is no particular reason for concern.

This limited availability of Bitcoin is a reason for some people to store their coins safely as well. Given the limited number, the value should go up at some point. Moreover, spending a Bitcoin means it will be harder to gain one back, as it either takes money or effort to get a new Bitcoin on the balance sheet.

Whether scarcity subconsciously forces Bitcoin users to hoard or not, is unknown at this point. Consumers are used to spending cash because a wallet refills itself through various means. Whether that is through a paycheck, welfare, winning the lottery, or anything else, there always seems to be cash within reach.

With Bitcoin, things are vastly different. There is no one automatically dispensing Bitcoin to users on a regular basis, as they have to buy them, or work for coins. Bitcoin learns people the real value of money and what they had to do to earn it. Major traders will not see it that way, as one Bitcoin is peanuts to most. But for a lot of people, earning that Bitcoin is a satisfying feeling.

Source: Reddit

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