Bitcoin: The Hardest Measure of Wealth

An investment can rise in price without making its owner wealthier in hard asset terms. More often than not, common performance reporting obscures this distinction by measuring returns in fiat currency, as though the unit itself were constant and not subject to debasement or asset dilution. Dollars, euros, and francs are great tools for settling everyday obligations efficiently. Over decades, however, inflation erodes what those units can actually buy.

The S&P 500 made this distortion particularly visible in 2025: it returned 18%, including dividends, while gold rose by 64%. Measured in the precious metal, therefore, the index lost roughly 28%, even though nothing in the portfolio changed except the denominator. What appeared to be an equity gain became a severe drawdown in hard money.

Our long-term analysis demonstrates that across the past century, sustained equity outperformance against gold was cyclical rather than permanent and that alternating periods of hard asset or risk asset regimes were usually catalyzed by policy interventions or external shocks. From Bretton Woods and the oil shocks of the 1970s to the Volcker era and the zero interest rate environment after 2009, each marked a fundamental change in the prevailing regime. Some tilted the playing field towards productive financial assets, others towards scarce monetary assets.

In our view, we are rapidly approaching the next possible regime shift. US debt crossed USD 40 trillion just as the Treasury is expanding bond buybacks and considering the Treasury General Account as an additional source of market support. Fiscal risk is mounting, yet the policy response is moving towards easier financial conditions. Whether characterized as liquidity management, stealth easing, or fiscal easing, this is how financial repression might return to the mainstage. That implies that debt remains on the sovereign balance sheet while the real burden is gradually transferred to the purchasing power of savers. With it, the debasement trade is back in full force and as a result, scarce monetary assets will very likely regain strategic relevance.

That is particularly important for Bitcoin. Its fixed supply, monetary neutrality, and lack of sovereign counterparty risk increasingly give it the properties investors traditionally sought from hard assets. In a monetary system once again leaning towards expansion, Bitcoin stands apart through absolute scarcity in a vast sea of abundance.

Abundance by Design

If one word captures the zeitgeist of today’s financial system, it is abundance. Money supply expands, equity supply is returning through new listings and secondary issuance after a decade of buybacks, corporations are issuing more debt, and governments are borrowing unparalleled amounts without a visible ceiling. Even precious metals add new supply each year. Clearly, the modern economy is extraordinarily good at producing more. Higher prices attract capital, capital finances innovation, and innovation usually unlocks new supply. This mechanism moves us forward, but it also strongly incentivizes supply creation.

Global equity issuance increased 14% in 2025, while US corporate bonds grew by 27% through July 2026, with AI financing explaining a meaningful part of this increase as it intensified both the equity and the bond supply side. The certain arithmetic of consistently positive cashflows from the last decade bent to uncertain returns on rapidly expanding infrastructure. Meanwhile, new IPOs will bring some of the largest private AI companies into public markets while sovereign debt is expanding faster than ever before, with Treasury issuance running 10% above last year’s already elevated pace. As more shares and bonds compete for the same pool of capital, supply, which has always mattered, is becoming the most defining feature of the financial system.

The central paradox of abundance is that dilution often follows prosperity. As the financial system expands, it becomes increasingly important to measure that prosperity against something that does not expand with it.

Scarcity in a World of Plenty

Even gold cannot fully escape the abundance machinery. Mine production reached another record in the first half of 2026, while higher prices and better technology continue to turn previously uneconomic deposits into supply. Gold remains scarce, but its scarcity is governed by geology, technology, and cost, none of which is immovable.

Aluminium offers a meaningful lesson. In the 19^th century, it was priced alongside silver because separating it from its ore was challenging and very costly. However, the Hall–Héroult process changed the economics of production ,turning a semiprecious metal into an everyday material.

Gold is unlikely to suffer the same fate, but its scarcity is exposed to the same principle, namely, that technology can shift its supply constraints. Better exploration, deeper mining, and technological breakthroughs can unlock deposits that were previously inaccessible or uneconomic. At the furthest edge, CERN has demonstrated that elements such as lead can be converted into gold. The quantities remain microscopic and the economics absurd, yet the reality is that there is a viable path to synthetic gold. And while more capital may finance more miners and more powerful machines, it cannot increase Bitcoin’s supply beyond 21 million. Unlike any other asset, Bitcoin has a terminal supply that technology cannot change of.

The bottom line is that everything expands except Bitcoin. To know whether a portfolio has genuinely compounded wealth rather than just increased in fiat terms, it must face the test of a hard asset and the hardest benchmark to beat is Bitcoin.