Things like gold, bitcoin, stamp collections, art, expensive cars etc serve a similar function: the function of "saving", as opposed to "investing".
With "saving" I mean storing some excess purchasing power in something that doesn't have a counterparty and doesn't generate income, but also can't be duplicated easily so is likely to at least not loose a lot of value.
Of course, all these saving devices have different properties.
Gold and bitcoin are liquid, whereas art is extremely illiquid. Gold and bitcoins are egalitarian, in the sense that a poor man buying gold gets the same thing as a rich man buying gold. Art is elitist and susceptible to huge winner-takes-all effects. All are susceptible to stealing, but cryptocurrencies are susceptible to total failure because of their complexity (bugs, mathematical weakness, ...)
Art = Tax Haven. Long time ago in my teens I worked in art outside of NYC and my friend's whole business was a Art Moving Company. Art isn't about art but to a very small number of people. I can't tell you how many times people would say that they don't even like the art they own.
Art is stored away where no one is able to see it, and all for tax havens. You can put your art into storage where the art sits and the owner doesn't have to pay taxes on their purchases.
I was just about to post this. I really love planet money. I regularly listen to their podcast as part of my regular runs and this really was a very interesting new information for me
Things like gold, bitcoin, stamp collections, art, expensive cars etc serve a similar function: the function of "saving", as opposed to "investing".
With "saving" I mean storing some excess purchasing power in something that doesn't have a counterparty and doesn't generate income, but also can't be duplicated easily so is likely to at least not loose a lot of value.
Of course, all these saving devices have different properties.
Gold and bitcoin are liquid, whereas art is extremely illiquid. Gold and bitcoins are egalitarian, in the sense that a poor man buying gold gets the same thing as a rich man buying gold. Art is elitist and susceptible to huge winner-takes-all effects. All are susceptible to stealing, but cryptocurrencies are susceptible to total failure because of their complexity (bugs, mathematical weakness, ...)