Bitcoin and the Mad Money Box

Reading time 4 minutes

Published on 09/04/2026

The value of Bitcoin fluctuates sharply over time. For this and other similar reasons, Bitcoin and comparable crypto-assets are not suitable for preserving the value of our savings over the long term. This is the lesson of the story we are about to tell.

The Mad Money Box

'What a funny watch!', Alice remarked. 'It tells the day of the month, and doesn't tell what o'clock it is!'. 'Why should it?', muttered the Hatter.

Imagine being given a rather unusual money box, a bit like Alice's watch. It is a mad money box: a strange, moody and unpredictable object, prone to sudden changes of temper. Even though you do not fully understand how it works, you decide to trust it and start using it.

Inside the money box you place a coin that can be used to make purchases in the real world. At the end of 2024 the coin was worth €10,000, and you had decided to keep it aside for a long‑awaited family trip.

But why is the money box 'mad'? You soon find out. By mid‑April 2025, the coin is still there, exactly the same, but its value has fallen to €8,000. At the beginning of October it has risen to almost €11,500: you feel wealthier and start imagining a better holiday. Then, just as you are about to book the trip at the end of February 2026, the value of the coin drops to around €6,000.

At that point, a realisation begins to take shape: your money box may be able to store your 'coin', but it cannot preserve its value over time. Preserving value means something very simple: setting something aside today and being reasonably confident that tomorrow it will be worth more or less the same. This money box may give you moments of excitement, but it certainly cannot ensure that you will achieve the goals for which you started saving. And all those ups and downs have taken an emotional toll: anxiety and worry have set in. It bears little resemblance to the money box you had as a child, which did not make you rich, but never let you down.

Is Bitcoin a store of value?

The changes in the value of the coin over time described above broadly reflect those recorded by Bitcoin over the same period. It is precisely this volatility that prevents Bitcoin, and similar crypto‑assets, from being a store of value like legal tender. Bitcoin also lacks the other two defining features of money: it is neither a unit of account nor a means of payment. Sharp fluctuations in value make it unsuitable for comparing prices, keeping accounts or making economic decisions.

This is the key point: Bitcoin cannot perform the functions of money. It is a speculative asset, characterised by large and sudden swings in value.

Bitcoin as an investment?

Not only is Bitcoin not legal tender; it is also difficult to regard it as an investment. Unlike assets in which savings are typically invested - such as bonds, shares or property - its value does not depend on the ability to generate income, such as interest, dividends or rental payments, nor on underlying economic fundamentals or expected cash flows. Its value depends solely on the interaction between supply and demand, which is strongly influenced by speculative dynamics and investors' expectations. The value of Bitcoin rises only if someone else is willing to buy it at a higher price, and it can fall rapidly if that demand fades.

Investing to protect savings and help them grow over time does not mean exposing oneself to extreme price swings, as if riding a roller coaster. It is a process that requires careful planning: setting objectives, assessing one's ability to withstand losses, and investing in a diversified portfolio of assets in order to contain risk for a given desired return. Everything that a mad money box cannot offer.