Vice President of Research at Riot Platforms: Bitcoin can be understood as a "savings reservoir" of excess global capital

Pierre Rochard, vice president of research at Riot Platforms, wrote that Bitcoin can be understood as a "savings reservoir" of excess global capital: when interest rates are low, liquidity is abundant, and physical investment opportunities with high expected return on investment (ROIC) are scarce, savings capital flows into Bitcoin - because of its absolute scarcity, a global digital open-source network with a fixed supply of 21 million. Over time, more and more bitcoins are held by long-term holders, corporations, exchange-traded funds (ETFs), and government entities, who view BTC as a strategic reserve asset rather than a tradable inventory. This makes the effective circulating supply of bitcoin highly rigid: most of the new demand can only be reflected by the increase in the fiat-denominated price, rather than relying on new tokens to enter the market circulation. When market conditions reverse (interest rates rise or risk appetite declines), speculators will choose to sell, but a large number of long-term savings holders will not follow suit; most of the capital entering the market will continue to accumulate. This asymmetry of supply and demand creates a "ratchet effect" in the bitcoin exchange rate: deep corrections are not uncommon, but the bottom after the crash is often higher than the low of the previous cycle.