Why crypto is the best way to protect your wealth against inflation
When productivity rises, the same money can buy more products and services. However, governments continuously issue debt to finance their operations, which increases the money supply. When the increase in GDP and the increase in money supply roughly match, where prices neither fall due to increasing productivity nor rise due to increasing money supply, it is called price stability. Price stability is the main mandate of the European Central Bank and one of two main mandates of the US Federal Reserve. Interestingly, stability is not defined as flat prices, but at rising prices around 2% per year, the inflation target.
An investor who wants to protect their wealth must look for better options than the price-stable currency, designed to lose 2% p.a. Assets like stocks and real estate can approximately retain their share of the whole economy. As the economy grows, their purchasing power grows alongside. Measured in the price-stable currency, they go up in value. Of course, stock and real estate prices fluctuate, especially for individual assets.
Supply-limited crypto assets promise to grow purchasing power likewise. Most prominently Bitcoin. With its 18-year track record of an immutable hard-capped supply of 21 million units and being available globally without service interruptions, it is seen by many as the ultimate hedge against inflation.
The importance of assets that maintain or grow purchasing power becomes more apparent when governments are unable to hold inflation at or below the 2% target.
When governments take on increasing amounts of debt, they rarely default outright. They hold rates below inflation to shrink the debt. Savers in cash and bonds pay for it by losing purchasing power.
If the claim that crypto is the best way to protect your wealth against inflation is true, we should see growing crypto adoption in places of higher inflation.
How higher inflation leads to a preference for crypto assets
| Country | Annual Inflation | Crypto Ownership |
|---|---|---|
 Argentina | 62% | 20% |
 Turkey | 28% | 24% |
 Nigeria | 18% | 27% |
 United States | 3% | 12% |
 Germany | 3% | 9% |
 Japan | 1% | 5% |
 Switzerland | 1% | 16% |
In the table, that is exactly what we see. Countries with high inflation, like Argentina, Türkiye and Nigeria, see high crypto adoption. Outlier Switzerland sees high crypto adoption despite low inflation.
Most crypto tokens we hold in our managed funds have a maximum supply. This, similarly to gold and Bitcoin, ensures growing purchasing power alongside economic growth, all else being equal. Importantly, the onchain businesses whose tokens we invest in are growing faster than the economy on average. Our funds aim to not only protect wealth, they aim to grow it.
F5 Crypto Take · Part 2 · November 2026