I realised you can use paracord to make a water bottle holder like the one I bought. It's not a way to store paracord, though. I think 60 cm is enough to make one with a handle.
You can tighten/loosen it by pulling on the handle/water bottle part, since they're connected beneath the knots. Tying more knots makes it harder to adjust. If you don't want to remove it, you can tie 10+ knots. This seems quite secure since if you pull harder on the handle, the water bottle loop becomes tighter.