Bitwise Chief Investment Officer Matt Hougan pointed out that the world is gradually realizing the "madness" of the fiat currency system. Central banks are purchasing large amounts of gold, while individual investors are turning to Bitcoin as a digital safe-haven asset against currency devaluation.
Background: Since the United States abandoned the gold standard in 1971, the financial community has generally accepted the fiat currency system, considering it an inevitable stage in the evolution of money.
Main Content: Hougan quoted writer David Foster Wallace's metaphor, emphasizing that people often overlook the most important realities around them. With global central banks significantly increasing gold purchases since the 2008 financial crisis, especially accelerating after the 2022 Russia-Ukraine conflict, it reflects concerns over fiat currency depreciation and asset confiscation. U.S. debt is approaching 37 trillion dollars, and gold has become the second-largest reserve asset for central banks. Individual investors show a stronger preference for Bitcoin, with Bitcoin ETF inflows reaching 45 billion dollars since 2024, surpassing gold ETFs' 34 billion dollars.
Impact and Significance: Whether gold or Bitcoin, investors are beginning to recognize that traditional stock and bond portfolios remain heavily dependent on fiat currencies, posing considerable risks. Although the Bitcoin market size is small, demand is noticeably growing, and it may become a new choice for central banks and institutional investors in the future.