When it comes to investing in Bitcoin (CRYPTO:BTC), there are two prevalent investing theses. The first is that Bitcoin is an investment and a store of value, and its scarcity will help it hold its worth, much the same way gold retains its value. The second is that Bitcoin is a transactional tool and has the potential to become one of the dominant forms of payment.

In this clip from Motley Fool Live, recorded on Feb. 22, "The Wrap" host Jason Hall and Fool analyst Auri Hughes look at some of the pros and cons of Bitcoin and what the future might hold.

Jason Hall: A tale of two Bitcoins, Auri.

Auri Hughes: Yeah. Basically, I think, the book, A Tale of Two Cities, starts off as it was the worst of times, it was the best of times. I think I'm seeing something similar with Bitcoin (CRYPTO:BTC), and I think there's two stories here, and some news out today I am going to highlight.

Let's go over the good. We're seeing greater adoption. A lot of companies accommodating Bitcoin. PayPal (NASDAQ:PYPL), you can accept, store Bitcoin, I believe. Robinhood, you can buy Bitcoin. [Square's (NYSE:SQ)] Cash App, you can buy Bitcoin. You got CoinDesk. You got all these ways to purchase Bitcoin now.

You've got companies using Bitcoin as a store of value, so something, let's say, you don't want cash on your balance sheet. You've got MicroStrategy (NASDAQ:MSTR) doing this, Tesla (NASDAQ:TSLA), and then now, to our audience, yours truly, TMF [The Motley Fool] is holding Bitcoin, and I think Tom Gardner is bullish on it. That's the good. We're seeing broader adoption, but then, I think there's another side of this story too.

Today, we've got some big news from a government representative. So Janet Yellen, who's the Treasury Secretary, has been making some comments about Bitcoin. Now, she's highly respected, she's academic. I think she's a graduate of Yale, has those credentials and etc. These were the comments she made. She was not bullish. From her language, she said, "It is not widely used as a transactional mechanism, it's used for elicit finance," so basically, illegal activity. "It's an inefficient way of conducting transactions" and "it uses a staggering amount of energy to conduct these transactions." Elon Musk made a comment, saying he thinks its maybe too high.

Then, and just my personal opinion, there's two types of assets. We have assets that produce other assets and then assets we price based on speculation. A business is the asset that produces cash. Then you've got gold, which is asset you have to buy and hope that someone wants to buy it later at a higher value. Bitcoin is a similar thing.

That leaves us with a lot of questions. I think the argument for Bitcoin, the risk, the thesis is, how is the government going to approach this? Are they fearful? Are they going to view this as an alternative to cash, it's something that's going to compete with cash? But I think this is a good indication. We need to start paying attention to this and how they're going to view Bitcoin going forward. I think Treasury Secretary Janet Yellen's comments today were very insightful for that.

Will it be outlawed in the future, or will this become a dominant form of payment? I think those are just some interesting things to note and consider, going forward. That's all I have on that.

Jason Hall: Yeah, it's interesting. I mentioned at the beginning of the show that, tomorrow will be a week ago, I actually bought a very small amount of Bitcoin. It's interesting, I own a stake in this thing now. I have money invested in this as an asset, yet I'm still somewhat ambivalent about its future, because it's going to be very hard for it to really be truly a transactional tool.

Just the mechanics of how transacting in Bitcoin works, it's an enormous friction to being something that we don't go down to the corner store and buy a pack of gum with Bitcoin. I don't think that's a likely future case. I've also struggled, again, with "how do we value it," because we certainly can't value it the way that we do business because again, it doesn't produce any cash flows.

But for me, it's coming back to two things. Now, I tweeted about this, but there's a lot of really smart people; as an example, [The Motley Fool CEO] Tom Gardner, and others who do think that it's going to become increasingly important as a store of value, whether it necessarily becomes a massive transactional tool or not.

Its potential as a store of value to me, I think, is going to be the thesis. We talked about it with all the cash that's been added to the global money supply. You think about yields. I was talking to Bill Mann. I can't remember the exact number, but it's tens of trillions of dollars of sovereign debt globally that generates a negative yield. People are literally paying governments to hold their money. Then you think about inflation-adjusted yields. Even on top of that, that's probably going to trail inflation in the terms of yields it generates.

My thesis is, well, don't sleep on it. I think it's too easy to disregard it and use the same trope that I've used. It doesn't generate cash flows, I'm not interested, and move on. For me, I took a small amount of skin in the game so I can start paying more attention.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.