Resolving the Intergenerational Prisoner's Dilemma: The Inevitable Path of Nomadic Capital Bitcoin

Original Title: The Generational Prisoner's Dilemma: Three Certain Truths and The Exit Liquidity Trap

Original Author: Jeff Park, Bitwise Advisor

Original Compilation: Saoirse, Foresight News

The global uncertainty index constructed by the International Monetary Fund (IMF) has recently reached its highest level since its establishment in 2008. The lack of clear direction and coordination in policy and trade has significantly worsened market sentiment since the previous historical peak, and this trend is likely to further intensify—especially in the Middle East, where the already shaky old global alliances are being drawn into an unprecedented conflict.

At the same time, the accelerated proliferation of exponential technologies such as artificial intelligence has left both experts and ordinary people increasingly confused: how should productivity-driven deflation be reconciled with a credit-driven inflationary monetary system? To make matters worse, private credit is facing an epic collapse, having previously supported this fragile capital supply chain at the cost of liquidity through capital price manipulation.

In the past week, we have witnessed a series of events:

· Iran appointed Mojtaba Khamenei as the new Supreme Leader, while U.S. crude oil prices surged nearly 40%, marking the largest weekly increase since 1983;

· AI company Anthropic sued the U.S. Department of Defense on the grounds of "supply chain risk";

· BlackRock set a redemption limit of 5% for its $25 billion direct lending fund, while investor redemption requests were nearly double that ratio.

No one can accurately predict the direction of these complex issues, as they are all unprecedented (notably, the three events mentioned are not independent of each other, which I will elaborate on later). At such moments, we need to step back and clarify the core: it is not about getting tangled in the unknowns, but about anchoring to the facts that you are absolutely certain of, which are indeed the direct causes of the aforementioned events.

As Sherlock Holmes said to Watson: "When you have eliminated the impossible, whatever remains, however improbable, must be the truth." Therefore, our task is not to chase the elusive unknown, but to root ourselves in the fundamental facts that already exist and are indisputable.

Based on this thinking, I believe there are three certain truths in the next decade filled with uncertainty—and their certainty will only become more pronounced at present. When I say "certain," I mean these are events with a 100% probability of occurring. The only truly unknown factors are the specific timing of their occurrence and, to some extent, the severity, but the catalysts for each event are bound to appear in our lifetime. When we anchor to these indisputable facts, we can transform the pervasive sense of helplessness into a firm belief in how to respond to the future.

Certain Truth One: The global population pyramid is inverting, and all asset classes built upon it will collapse accordingly

In 2019, a statement from the World Economic Forum caused a significant shock in institutional consensus: "The number of people aged 65 and older has surpassed the number of children aged 5 and younger for the first time." Seven years later, after a devastating global pandemic, societies around the world are already feeling the heavy pressure and adverse effects of this trend, and this is just the beginning.

The global fertility rate is dangerously approaching below the replacement level, and in developed markets, this threshold has long become a thing of the past. The combination of declining birth rates and an aging population will create the highest dependency ratio in human civilization history. Worse still, the elderly ruling class in developed countries will ultimately need to liquidate assets to fund their increasingly extended lifespans. The result will be a grand intergenerational wealth transfer: the financial assets accumulated by an entire generation of aging individuals must exit the market through massive liquidity withdrawals.

The scale of this capital is staggering: the total market capitalization of the U.S. stock market is approximately $69 trillion (with the baby boomer generation holding over $40 trillion), while the value of U.S. residential real estate adds another $50 trillion (despite the baby boomer and preceding generations accounting for less than 20% of the population, they hold over $20-25 trillion in assets). Nearly $60-70 trillion in wealth needs to exit the capital asset system, while at this time, the income pricing power of the next generation of young people is continuously weakening, and disposable wealth is scarce.

When this generation of aging individuals is ultimately forced to sell assets, it will almost inevitably trigger long-term asset deflation.

The underlying logic of the stock market is essentially a reflection of demographic trends: when the group of savers accumulating assets steadily grows and approaches retirement, the market rises. The brutal collapse of "private credit" is the most direct example—this is another $2 trillion "time bomb" lurking in pension funds, endowments, and life insurance companies, masquerading as liquidity conversion for the young, but is essentially close to fraud.

However, once the younger generation realizes that they are becoming the "liquidity exit takers" for their parents, they will choose not to enter the market. No one will voluntarily buy into a long-declining asset. This is precisely why the Trump administration pushed for children's investment accounts, why the U.S. is actively promoting stock tokenization (to allow foreign capital to more easily take on U.S. stocks), and why registered investment advisors (RIAs) are widely adopting automated model portfolios without questioning the core issue: "Why do this?"

These measures are all aimed at delaying the inevitable: when the baby boomer generation sells assets at inelastic prices, unless young people, foreign capital, or machines are forced to take over, the market will have no buyers. **Just look at the design of the Trump children's accounts: ** these accounts prohibit any form of diversification, explicitly banning bonds, international stocks, and alternative investments, allowing only allocations to U.S. stock indices. After turning 18, the account will convert to an Individual Retirement Account (IRA) with high redemption penalties—contrasting sharply with the standard Uniform Transfers to Minors Act (UTMA) accounts, which allow complete freedom of redemption after reaching adulthood.

Clearly, this is not a wealth appreciation tool designed for children, but a one-way closed channel lasting over 40 years, intentionally or unintentionally aimed at turning an entire generation of young people into "passive liquidity takers" for their predecessors.

This phenomenon in the real estate sector will be even more pronounced, as it is at the center of the largest asset bubble in history. A generation has deliberately hoarded fixed-supply assets for decades, using duration effects to completely sever the connection between housing prices and the potential economic productivity of communities. For most residential and commercial real estate (excluding high-quality assets operating in another economic system), "affordability" has long been a false proposition.

Young people whose wages never catch up with housing prices will never buy homes at current prices. For the fortunate, many properties will eventually be naturally passed down to their children; if there are no children to inherit, they will ultimately be sold into a market where the number of homebuyers and households is structurally decreasing. Once again, the mathematical logic is cruel and inevitable: significant deflation in real estate is not a matter of possibility, but an inevitable conclusion.

To accelerate this liquidity event, the transformation of real estate from an investment asset to a consumer good will form a vicious cycle with rising property taxes—housing prices will increasingly be tied to government spending inflation, including public schools, social services, municipal infrastructure, and the overall trend of service costs generally exceeding goods costs. Just the fiscal pressure will force the market into unbearable selling behavior.

New York City Mayor Mamdani's push to raise property taxes is not an isolated case, but a harbinger of the grand transaction of the "lazy capital asset tax" era, particularly in cities where wealth inequality has reached a level that makes the status quo politically unsustainable. This leads to my second certain truth.

Certain Truth Two: Wealth inequality will reach a breaking point, and wealth taxes will become an unforeseen answer

The aforementioned demographic challenges essentially represent a vertical collapse: the population pyramid is slowly inverting, the base population is shrinking, while the weight of the upper elderly dependency group becomes unsustainable. In addition to this vertical demographic collapse, there exists a more concerning horizontal fissure—income inequality.

When we see headlines like "The top 10% of the global population owns 76% of global wealth" (data source: United Nations 2022 World Inequality Report), we need to understand a key distinction: this is not a story of some countries getting rich first while others lag behind, but rather what is happening within every country globally: the wealth gap is widening everywhere, and accelerating across all measurable time dimensions.

More accurately, the issue is not just income inequality, but wealth inequality. In human history, never has such a high proportion of wealth been concentrated in the top 1%. In the United States, for example, the share of net worth held by the top 1% has continued to rise and is now approaching one-third of the nation's total wealth.

The distinction between income and wealth is crucial. Income is a transactional concept, a "flowing currency," a measure of market pricing for productivity; whereas wealth is not. Non-capital wealth is "static currency": it lacks intrinsic productivity and, in a credit-driven zero-sum game, slows down the velocity of money circulation necessary for economic operation.

When wealth is as highly concentrated as it is today, it stops flowing, and the velocity of consumption that sustains broad economic activity quietly suffocates.

In this context, in the absence of significant productivity growth to create new resources, despite ongoing controversies surrounding wealth taxes, they will ultimately become an inevitable result of fiscal nihilism. The reason is that the only feasible mechanism to rebalance this pattern is to tax wealth itself—regardless of how poorly designed or logically unsound it may be.

Wealth taxes can be seen as a mirror of social security: the former extracts funds from the bottom to subsidize survival, while the latter extracts funds from the top to maintain survival. Both are essentially levies on unrealized value, with the only difference being direction: the former is vertical (i.e., extracting from the young), while the latter is horizontal (i.e., extracting from the wealthy).

The process of implementing wealth taxes has already begun. On February 12, 2026, the Dutch House of Representatives passed a landmark bill that imposes a uniform 36% tax on the annual appreciation of stocks, bonds, and cryptocurrencies, regardless of whether these assets have been sold. The bill is currently awaiting Senate approval, and the parties supporting it hold a majority, making its approval almost certain. Whether this policy is morally justifiable, mathematically rigorous, or legally enforceable is irrelevant—those who get bogged down in these issues will completely overlook the larger core. The truly critical question is simple yet far-reaching: what will happen when other countries around the world follow suit?

Consider the birthplace and last bastion of capitalism—the United States. Polls by The New York Times on public attitudes toward wealth taxes show that, except for college-educated men (a rapidly shrinking demographic), support for wealth taxes is nearly unanimous across all population groups.

This is the core of understanding capital "citizenship." People generally believe that the liberalization of capital accounts is an inherent feature of the modern world, but vulnerable groups know well that when the state chooses, capital can be restricted at any time—countries like China and Russia have provided examples of this. The historical issue has been "betrayal": any single country imposing a wealth tax will see capital simply flow to other jurisdictions. However, as global fiscal nihilism intensifies, the political will of various countries is gradually converging toward a singular choice, and collective negotiation arrangements will become inevitable; those havens that have long profited from the prisoner's dilemma will no longer be allowed to remain aloof.

After the Netherlands made this decision, the European Union has been actively coordinating a tax framework aimed at preventing capital outflows among member states. By the middle of the 21st century, the global passport for capital will be revoked, replaced by a "Schrödinger visa"—which is simultaneously valid and invalid in the eyes of different regulators. Local restrictions on capital will only exacerbate the demand for "external funds" that can circumvent compliance layers. Welcome to the era of hard currency-supported price-species economic revival.

According to the framework proposed by David Hume in his 1752 essay "On the Balance of Trade," modern investors have long defaulted to viewing "external funds" as assets like gold and bitcoin—assets that are stateless, jurisdiction-free, and not subject to any sovereignty. But four hundred years later, a new class of "external funds" is emerging that will fundamentally redefine the concept of comparative advantage. It is time to write a new paper on international relations: "On Intelligent Balance."

As Hume stated, trade surpluses and the flow of gold determine a nation's relative strength; today, the new determinants of comparative advantage will be the concentration of productive artificial intelligence infrastructure—whoever controls computing power, data, and the model rules governing all other systems will dominate. Capital will flow toward intelligent hegemony just as it once flowed toward manufacturing hegemony. The countries, institutions, and individuals that first grasp this trend will define new wealth hierarchies. This leads to my third certain truth.

Certain Truth Three: Artificial intelligence will destroy the relative value of labor and redefine capital value for an intention-driven economy

Karl Marx described capital in "Capital" as "dead labor, which, like a vampire, can only survive by sucking the life out of living labor; the more it sucks, the longer it lives." This famous quote highlights the socialist view: capital, existing in the form of accumulated labor, continually increases in value by consuming the living labor of workers.

However, Marx made a critical error in his analysis: he believed that capital itself is inherently lifeless and must continuously consume human labor to be profitable. But with the rise of credit and now the explosion of artificial intelligence, we are about to enter an entirely new paradigm—where the "vampire" not only possesses agency but can even bypass human labor, profiting simply by continuously consuming kinetic energy. As shown in the chart, the trend of capital income's share rising and labor income's share declining has been brewing for over a decade, and artificial intelligence will push this trend past an irreversible turning point.

Since 1980, the share of labor income in U.S. GDP has dropped from about 65% to below 55%, even before the proliferation of large language models (LLMs). Goldman Sachs estimated in 2023 that generative artificial intelligence could put 300 million full-time jobs at risk of automation.

In other words, artificial intelligence is not only a capital-intensive technology but also a technology that undermines labor. The rise of artificial intelligence will permanently alter the underlying economic principles governing societal operations, reshaping the irreversible relationship between capital and labor. More specifically, when labor costs converge with computing costs, a new "capital war" will erupt globally, requiring unprecedented government subsidies, radical industrial policies, and fiscal policies. In this world, capital will reign supreme: asset ownership will become the only barrier between dignity and the permanent underclass. This is also what the IMF predicts: in an AI-dominated economy, the federal tax base will shift from labor income to corporate income taxes and capital gains taxes.

However, capital itself will also be redefined—because asset ownership will no longer be limited to financial assets. The vast artificial intelligence industry relies on another factor whose value is even more precious and irreplaceable than pure energy: data. Specifically, the data footprint you leave every day provides context for model reasoning and learning.

The world is moving toward a new paradigm: human thoughts, behaviors, instructions, preferences, and especially intentions will hold immense value. When intention itself becomes capital, a completely different economic order will emerge—asset ownership will take on a strange form of "non-custodial" that detaches from the framework of familiar KYC/AML financial institutions. Intelligent agent systems have begun to equip cryptocurrency wallets, autonomously paying for computing power, APIs, and data. For a world where value needs to flow seamlessly between intelligent agent systems and preferences are explicitly transactional, this is a practical inevitability—in which labor and capital will exist in a superimposed "Schrödinger state."

Historically, financial assets have always clearly fallen within the regulatory boundaries defined by financial regulatory agencies such as the SEC, CFTC, FINRA, and FASB.

But as assets evolve into forms with "active attributes"—where your data footprint becomes collateral and intention becomes a realizable output (pricing models based on consumption will be realized through open, API-based products and embedded in context)—artificial intelligence systems will blur regulatory boundaries from all directions. The FCC has jurisdiction because your cognitive information is transmitted through the spectrum; the FTC has jurisdiction because intention collection falls under consumer protection; the DoD has jurisdiction because data sovereignty is a national security issue.

In other words, this superimposed effect will not only remain at the asset level but will also extend upward to the entire regulatory system. When no single entity can define clear boundaries for "financial assets," the definition of currency (who issues it, who protects it, who confiscates it) will become the most contentious geopolitical issue of this century.

Welcome to the era of intelligent currency.

Three Certain Truths, Two Convergences, One Conclusion

If you've read this far, you may feel uneasy—perhaps finding yourself once again caught in immense uncertainty. But remember: the entire purpose of this article is to find clear answers. Let us reiterate the most core conclusion: the three forces of demographic collapse, wealth inequality, and labor replacement driven by artificial intelligence will inevitably occur. They are not independent risks that need to be weighed and hedged separately, but are logically converging simultaneously. The population pyramid is collapsing vertically, while the wealth levels at the base are tearing apart, amplified by a technological revolution that favors only capital.

Many investors attempt to address this uncertainty by tackling local problems with localized solutions: rotating assets here, hedging there, betting on thematic investments in AI infrastructure, or holding blind hopes for cryptocurrencies. The most tempting and likely to lull traditional investors into complacency is the rebuttal of technological optimism's "escape pod": AI-driven productivity growth will quickly expand the wealth pie enough to outweigh the impacts of demographic collapse. This argument sounds persuasive but is precisely a seemingly complex yet fundamentally off-base logic.

Throughout human history, the speed of productivity enhancement and fairness has never been fast or sufficient enough to avoid the political and social divisions triggered by inequality. The Industrial Revolution did not prevent labor uprisings; rather, it became the catalyst for them—even though it created unprecedented total wealth. The key point is that artificial intelligence is not a neutral productivity multiplier: by its very architecture, it is a concentrator of capital. Every bit of productivity it creates will first and most durably accrue to those who control computing power, data, and models. Optimists do not believe the wealth pie will not grow; they are mistaken about who will get to share in that pie—and that is the crux of the entire debate.

When you examine these truly irreversible global phenomena from a sufficiently macro perspective, the direction of firm belief will unexpectedly become clear:

· Global population aging and contraction, the demographic situation will inevitably worsen, which is 100% certain;

· Wealth inequality will expand to trigger capital restrictions on a global scale—whether across borders or domestically, this is 100% certain;

· Artificial intelligence will structurally favor capital, giving rise to a new type of transitional capital never seen before in the global economy, which is also 100% certain.

Most critically, the common core characteristics of these three points point to one word: global. Intergenerational population structures, asset allocations, and capital costs have never been as highly correlated in history as they are now, and this correlation is only strengthening. Furthermore, this correlation spans not only space but also time—because the evolution of the wealth population structure is one-way and irreversible. This means that this convergence is not only global but also synchronous.

In summary, this forms what I see as the most core collective negotiation issue of the modern century: the generational exit liquidity prisoner's dilemma. It raises the following questions:

· When the younger generation also feels that the government's directive is to "take over for their parents," will they still voluntarily participate in "the ownership of American capitalism"?

· When wealthy friends turn to "tax-efficient" planning, will the top wealthy voluntarily bear high tax burdens?

· When profit-driven competitors ignore capital costs and continue to expand, will AI companies voluntarily slow their pace of development?

A Nash equilibrium will thus form: all participants will choose to betray this rationally dominant strategy—regardless of what others choose, because the cost of inaction is too heavy. Therefore, when the critical juncture arrives, everyone will rationally seek to exit liquidity simultaneously.

This Faustian bargain of liquidity must not be viewed as a potential risk or a tail risk that needs to be modeled and hedged, but rather as the most predictable large-scale coordinated event in the history of human capital markets. Some may say that in a deflationary environment, you should hold nominal interest-bearing instruments like bonds or ride the wave of AI stocks. Perhaps so. But my core principle is simpler and more structural: you should hold assets that will not make you a liquidity exit taker for others. Within this framework, the assets you should least hold are, in order: real estate, bonds, and U.S. stocks. These are all duration manipulation tools, and whether intentionally designed or not, they represent the most significant intergenerational wealth plunder in history.

Conversely, your ideal assets should simultaneously meet three inverse conditions:

1. Currently have the lowest holding rate in terms of population structure, but are expected to become the highest holding rate asset in the future;

2. Are most likely to become a jurisdiction-free safe haven when capital liquidity is strictly taxed, restricted, or confiscated;

3. Are the forms of capital closest to being seamlessly used in a self-sufficient intelligent world, replacing human labor to complete productivity functions without intermediaries.

When the Ottoman Empire breached the walls of Constantinople in the 15th century, the Byzantine merchant class lost all assets valued in imperial credit: land, titles, government bonds. None were spared. But those young scholars and enterprising merchants migrated their portable wealth—manuscripts, gold, knowledge—to Florence, ultimately igniting what would later be called the Renaissance.

Among this group was a young Byzantine scholar named Johannes Bessarion. Born in 1403 in Trabzon by the Black Sea, he fled Constantinople with boxes of irreplaceable Greek manuscripts, which carried nearly all the intellectual heritage of the ancient world. He provided the most books and manuscripts to the West in the 15th century, thereby creating one of the earliest forms of "information technology": the Marciana Library—the first open-source knowledge repository in Latin Europe (i.e., a public library). This collection, housed in Venice, became the direct material for Aldus Manutius, who printed the complete works of Aristotle and dozens of Greek classics, sparking the printing revolution, which subsequently led to the Reformation, the Scientific Revolution, and the Enlightenment. The movable, autonomous, jurisdiction-free capital that Bessarion carried with him ultimately nurtured Western civilization over five centuries.

Capital that can flow across time and space survives; that which cannot will face extinction.

This leads to our final conclusion—the only radical decision worth considering in the face of numerous traditional choice traps:

What you truly need to hold is nomadic capital. This capital can freely migrate across intergenerational population structures, political boundaries, and the native ecology of artificial intelligence; it can bypass the "Strait of Hormuz" of currency. In the 21st century, nomadism is digital.

Specific investment tools vary by individual, but radical investment theory provides a feasible framework: allocate 60% compliant assets and 40% risk-resistant assets. However, if you make prudent decisions strictly following the three conditions above—holding assets that young people will ultimately need, holding assets that governments find difficult to touch, and holding assets that are practically tradable in a self-sufficient economic system—the outcome will no longer be a prediction but an inevitability. Uncertainty will ultimately transform into a constant.

After all, throughout history, there has only been one disruptive asset that has simultaneously met these three conditions since its inception as code. For those with high agency, this step is already simple enough.

The rest is just a matter of timing.