➡ The global financial market is adjusting to a world it wasn’t prepared for, with traditional growth models being disrupted. This has led to a shift in investments from growth to value, commodities, and physical assets. However, Bitcoin stands out as it doesn’t share the vulnerabilities of other growth assets and can’t be replicated or diluted. In a world where AI is making everything abundant, Bitcoin’s scarcity could make it a valuable asset, as it’s immune to the factors affecting other growth assets.

There’s a rotation starting that most investors don’t see yet. AI isn’t just changing technology. It’s forcing capital to move. And if that shift continues, Bitcoin could end up being one of the biggest beneficiaries. Now, I know, Bitcoin’s been getting hammered, right? And if you’re watching this, you’ve probably heard, you know, all the usual explanations, like, it’s just a cycle, or, I don’t know, liquidity’s tight, or risk assets are pulling back, or I don’t know, whatever, sentiment got too far ahead of itself. And look, those aren’t wrong, right? Those are real, right? That’s happening.

But here’s where I think most people are making a really big mistake. They’re treating this like every other pullback. They’re using the same framework that they’ve used for the last decade. The one where Bitcoin is just a high beta tech trade that goes up when the NASDAQ goes up, and it goes down when the NASDAQ goes down. For a long time, that framework worked. Bitcoin did trade like a leveraged bet on growth. It moved with software stocks, moved with risk appetite, it moved with the NASDAQ. So when tech pulls back, then Bitcoin pulls back harder, right? That’s the pattern.

That’s what everybody expects. But what if that framework is breaking? What if the thing pulling tech down this time isn’t a cycle, but it’s a structural shift? And what if Bitcoin doesn’t actually belong in the same category as the assets that are getting repriced? And once you see this, once you see it the way that I think about Bitcoin in your portfolio, it’s going to completely change. So let me walk you through how I’m seeing this right now. To understand what’s shifting, you have to understand the model that built the last 15 years.

All right. Now, after the financial crisis, we entered this extraordinary period where interest rates went to zero. So money was cheap, right? The entire market started rewarding one thing above everything else, scalable code. Think about what made a good company valuable in that era, right? You didn’t need factories anymore. You didn’t need physical inventory. You didn’t need 10,000 employees. You needed a piece of software that could reach millions of users with almost zero marginal cost. That’s the magic of code, right? You write it once and it scales globally. Now also, the old software regime, it gave us recurring revenue, 80% margins, predictable cash flows.

And of course, Wall Street love this, right? They gave these companies massive multiples because the economics were incredible, right? And that created the growth era. The Nasdaq dominated this era. Software ate the world. SaaS companies were trading at 20, 30, 40 times revenue, not earnings revenue, because the model was that defensible, right? You could build a product. You could lock in your customer. You could grow the subscription base and switching costs kept the competitors out, right? That was the moat. Code, it was the moat. But here’s the thing. Bitcoin got pulled into that trade, right? Not because anyone sat down and said, hey, Bitcoin’s a software company, but because of how capital gets classified, right? Bitcoin lived in that growth bucket.

It was a risk on asset. It was correlated to tech. And so institutional models treated it like a high beta extension of the Nasdaq. So when growth went up, Bitcoin went up faster. When growth came down, Bitcoin came down harder. Now, for a while, that classification made sense, right? Because in a world where scalable code was keying, Bitcoin, you know, digital money, it looked like another digital bet. But that classification was never actually accurate. It was just convenient at the time. Now, what’s happening now is forcing the market to figure that out.

Now, if you watch my channel for a while now, you know, I love finding historical patterns, because if you understand history, this starts to feel less like speculation and more like pattern recognition. Now, for about 100 years, markets have gone through, you know, these different regime shifts, where they repriced the economy and the rewards of the economy. Now, in the industrial era, the moat was capital, right? Capital intensity. If I could build railroads or steel or oil, if I could build up physical infrastructure. So if you could build something massive, something expensive that nobody else could replicate, then you won.

That’s what the market rewarded, right? Heavy industry, physical scale, barriers that were made of concrete and steel. But then the software era came in, right? The software regime flipped that completely upside down. Code then scaled globally, right? Distribution went digital, margins expanded, because you didn’t need the factory anymore, right? Now you could have asset light businesses and they dominated. The moat shifted from physical capital to intellectual capital, and the market repriced accordingly, right? The most valuable companies in the world went from oil majors and industrials to software platforms. Now this is the key part.

We’re entering something different once again. Intelligence itself is becoming abundant, not just software, not just code. Actual cognitive output is being commoditized in real time. Now when something becomes abundant, it stops being the moat. So if industrial dominance gave way to software dominance, and now software defensibility is being challenged by AI, then the question that every investor, you and I should be asking is, what becomes scarce next? All right, so now let’s talk about what AI is actually doing to the growth trade, because this is where most people are getting it completely wrong.

You see, right now, the popular narrative is that AI is bullish for tech. And on the surface, that makes sense, right? I mean, tech companies are building AI, tech companies are selling AI. So AI must be good for tech stocks, right? Well, not exactly. Because here’s what’s actually happening. AI is making intelligence abundant. And while that sounds like a good thing, and for the world, it is right for you and I, it really is. But for the companies that built their entire business model on moats, that’s a problem. Let me explain what I mean.

Think about what made a SaaS company valuable five years ago, right? You had a proprietary software, you had a user base that was locked into the platform. And then because of that, you had high switching costs. So you had this moat, and it was built on the fact that your code did something that nobody else’s code could do, at least not as well or cheaply. But now, AI is dissolving all of that. Because when intelligence becomes a commodity, when everyone can spin up an AI agent that replicates what your software does, then your moat disappears, right? Not just your revenue, but your moat.

And that’s the distinction that matters. Now, of course, currently, these companies, they’re still making money, right? The hyperscalers, they’re still growing revenue at 15 plus percent. So this is not a story about businesses going bankrupt. This is a story about defensibility. The market’s asking a question that it hasn’t asked in over a decade. Can you actually defend your business against what’s coming? Now, for most software companies, the honest answer is, they don’t know. Let’s add another layer to this. The acceleration is, well, it’s accelerating. Elon Musk called it the supersonic tsunami.

Now it’s hitting multiple directions all at the same time. So right now we have open source models that are basically free. We have Chinese labs releasing competitive models at zero cost. You’ve got individuals, not companies, individuals running AI agents on a Mac mini in their apartment doing what entire teams used to do. So if you’re a hyperscaler and you’re spending $650 billion this year on data centers, and you can’t guarantee the revenue comes in to justify that spend, what happens to your equity? Well, it compresses. If you’re a SaaS company trading at 30 times revenue, and your customer can now get 80% of your functionality from an AI agent for free, what happens to your multiple? Well, it compresses.

Now this is what the market’s processing right now. Not a panic, not a crash, a re-pricing of defensibility. See, AI doesn’t destroy revenue. It compresses this defensibility. Defensibility goes down, modes shrink, margins get pressured, and the multiples compress. And in plain terms, the growth trade that defined the last 15 years of the markets is getting structurally repriced. And again, not because these businesses are bad, but because the thing that made them special, the scalable code with defensible margins is being commoditized by something more powerful than code. And that re-pricing doesn’t happen overnight, but it’s, but it’s happening pretty fast, right? You can see it in the SaaS charts, you can see it in the multiple compression across the software industry.

And we’re at the lowest multiples in that space since before the iPhone came out. I mean, that’s a signal. So now the question becomes, if all that growth capital, I’m talking trillions of dollars, if it’s sitting in growth buckets, and it starts to realize that the model’s changed, then the question is, where does it go? Well, this is where it gets really interesting, because of course, capital doesn’t just disappear, right? I think people forget how this actually works. When you hear the market is down, or growth is selling off, it sounds like money’s evaporating, but that’s not what happens.

Money moves, it rotates, it finds a new home. So let me walk you through the mechanics of how that rotation actually plays out, because it’s not random, right? There’s, there’s a machine behind this. You see, most of the serious capital in the world, the institutional money, we’re talking pension funds, endowments, hedge funds, the smart money, it’s all organized into buckets. You’ve got a growth bucket, you’ve got your value bucket, you’ve got your fixed income bucket over here. And those allocations, they’re managed against benchmarks and risk models. And here’s the key.

You see, when multiples compress in the growth bucket, when the names that drove your returns for a decade start reprising, then the models force you to reduce your exposure. Again, for shoe, it’s not optimal. If you’re a hedge fund, and you’re down, say 10% in a month, you’re not sitting there philosophizing here, right? You’re cutting risk, you have to write your mark month to month, your investors expect performance reporting every 30 days. Now, personally, I buy and hold, right? I look at the long term here. I look at the direction that we’re going.

I think most of you should do that as well. But I’m also a partner at a venture capital fund, right in the Bitcoin opportunity fund. And our investors want to see performance quarterly and annually. So I know how those decisions get made. It’s not a thoughtful long term repositioning. It’s pressure, right? It’s for selling that happens here. So what you’re seeing right now in the markets, it’s not just AI anxiety. It’s the plumbing of institutional capital trying to reposition for a world that it wasn’t built for. We have trillions of dollars that are allocated to a growth model that assumes software modes were permanent.

And those modes are eroding in real time. So that money in that bucket, it has to go somewhere. Well, some of it goes to value. Some of it goes to commodities. Some of it goes to physical assets, like things you can touch, things that are tied to the real economy, things that benefit from the build out of AI infrastructure, rather than being disrupted by it, things like critical minerals, energy, things like that. But here’s the problem with all those commodities, they’re cyclical, right? Industrials are cyclical, right? They’re value trades, they’re not growth trades.

They work for a rotation, but they don’t solve the core problem, which is that most of the world capital is allocated to growth, right? It lives in this growth bucket. It wants growth characteristics. It needs an asset that behaves like growth without the vulnerability that AI just exposed. And that’s where something has to separate. Because you see, up until now, Bitcoin’s been lumped in with everything else that’s selling off, right? It’s in the growth bucket. It trades with tech. It correlates with the NASDAQ. So when software gets hit, then Bitcoin gets hit as well.

But structurally, and this is the part that I think the market hasn’t figured out yet, Bitcoin is not a software margin business. It has no revenues to compress. It has no moat to a road. It has no employees to replace. It has no competitor that can ship a better version of it for free. You see, Bitcoin is in the growth bucket by classification, but it doesn’t share the growth bucket vulnerability. Now, once the distinction becomes clear, once the market stops trading Bitcoin like a leveraged NASDAQ bet and starts asking what it actually is, then that rotation into Bitcoin doesn’t just make sense.

I think it becomes structural. But if we’re saying that Bitcoin is different, that’s not enough, right? There’s lots of things that are different. Cash is different. Gold is different, right? Farmland, that’s different. The question is, why does Bitcoin specifically gain a structural premium in an AI-denominated world? Now, the answer comes down to one word, scarcity. Because when intelligence becomes abundant, the rules of what the market rewards flip. And most people haven’t caught up to that yet. So in a world where almost everything is becoming more abundant, what isn’t? That’s the investment question of the next decade.

Now, scarcity means something very specific in investment context. It means the asset can’t be replicated and it can’t be diluted. No one can ship a cheaper version. No one can inflate the supply because the economics changed. Software fails every one of those tests right now, right? The hyperscalers are spending $650 billion a year just to stay in the game, but with no guarantee, the returns show up. Commodities, right? They’re cyclical. They spike on demand, but they come back down. They’re trades, not structural growth assets. But Bitcoin passes every single one. There’s only 21 million with a fixed supply.

There’s no revenue to compress, no margins to erode. No competitor can ship a better version for free. And here’s the irony. In a world where every business moat is being challenged by AI, Bitcoin’s moat is the only one AI can’t touch. Because it’s not built on intelligence, it’s built on math. Cryptographic scarcity. Decentralized consensus that no single entity controls. And here’s something people aren’t talking about enough. AI might actually make Bitcoin’s security story stronger. You see, as AI agents become more powerful, as cybersecurity threats escalate, as the ability to break into centralized systems accelerates the value of a decentralized, cryptographically secured network, it goes up, not down.

See, what I’m saying is that AI increases the supply of intelligence, it does not increase the supply of Bitcoin. The same force that is compressing software multiples, the same force that is eroding business modes, may actually increase the structural premium on scarcity. And that’s not speculation. That’s just how markets work. When everything becomes abundant, the things that can’t become abundant, they get repriced. And right now, Bitcoin is the only asset that sits in the growth bucket. That’s institutional capital already, right? It has a framework to allocate to, while being structurally immune to the thing that’s re-pricing everything else that’s in the bucket.

It’s the only growth asset that’s scarce, right? That’s Bitcoin. Not because of that narrative, not because of a meme, but because of what it actually is, provable, programmable, fixed supply scarcity in a world that is making everything else abundant. So here’s how I’d frame this out. If Bitcoin continues to be treated as a tech beta, right, just another risk on asset that trades with a NASDAQ, then yeah, it stays volatile. It’s going to keep getting pulled down every time software sells off. But when the market starts to recognize what’s actually happening here, that AI is re-pricing defensibility across every growth asset in the world, and then also that Bitcoin is the one asset in that bucket that’s structurally immune to it, then the re-pricing starts to go the other direction.

Now, long-term, AI doesn’t weaken Bitcoin. It increases its role. The last decade rewarded scalable code. The next decade will reward provable scarcity. And that’s a very different world. If you’d like to see a deeper dive on Bitcoin and its volatility, then you might want to watch this video right here, and I’ll see you over there. [tr:trw].

See more of Mark Moss on their Public Channel and the MPN Mark Moss channel.