On 11 November, the IMD Tech Community took a deep dive into the various uses of crypto for wealth preservation and how different types of crypto assets fit into the broader financial landscape, guided by the following speakers:
- Sabrina Boudefar is the founder of NOMA and TOOKLE.io. She advises on crypto-economics and fundraising, speaks at industry and academic forums, and designs blockchain-based economic strategies.
- Juan Martin Ortiz Rocha is an innovation leader specializing in creating and launching new products, services, and emerging technology initiatives. His work spans corporate and startup environments, driving business growth and client impact.
- Olivier Gaillard is a banker, entrepreneur, and certified Bitcoin professional. He pioneers digital finance innovation at the intersection of traditional banking and decentralized technologies.
Why wealth feels less secure today
Over the past 20 years, prices have risen significantly in major economies. In many countries, consumer prices are substantially higher than they were two decades ago. Some economies have experienced extreme inflation, while even traditionally fiscally conservative countries have sustained meaningful price increases. As a result, cash buys less than it used to.
Budget deficits have widened, especially in the wake of COVID-19, and central banks have responded with large liquidity injections and prolonged periods of low interest rates. This has helped stabilize parts of the economy, but it has also expanded the money supply faster than the real economy.
At the same time, investors looking to preserve purchasing power have pushed many traditional asset classes to or near record highs: equities, real estate, bonds, and even gold. Younger generations often face high living costs, high asset prices, and lower real purchasing power than their parents did at the same life stage.
“Inflation erodes purchasing power while wage growth struggles to keep up.”
Against this backdrop, more investors are asking whether the traditional mix of cash, bonds, equities, and property is enough to protect wealth in the long term, and whether alternative, scarce, and decentralized assets might play a complementary role.
This question is reinforced by one simple fact: very few assets consistently preserve wealth, and in recent years, Bitcoin has been the top performer.
Bitcoin: a scarce, decentralized alternative
The British comedian John Oliver once quipped, “Cryptocurrencies are everything you don’t understand about money combined with everything you don’t understand about computers.” But if you don’t understand it, now is the time to tune in.
Bitcoin was introduced in 2009 to transfer value directly between peers without relying on banks or other intermediaries. It is several things at once: a piece of software that anyone can run, a global network of independent computers (nodes), a cryptocurrency, and a blockchain – i.e., a public database containing the full history of transactions since inception.
The network is maintained by a decentralized group of participants who validate and record transactions. New blocks of transactions are added through a process often referred to as “mining,” which follows strict rules defined by the protocol.
A key design element is scarcity: the total number of bitcoins that can ever exist is capped at 21 million units. Issuance follows a transparent schedule that gradually reduces the reward over time, until no new bitcoins are created. This stands in contrast with fiat, or government-issued, currencies, where the supply can expand significantly through policy decisions.
Bitcoin’s perceived value stems from this combination of decentralization, security, transparency, and predictable scarcity.
For investors who are worried about inflation, monetary expansion, and currency depreciation, these characteristics make Bitcoin an interesting candidate as a long-term store of value, separate from any single government or central bank.
Ethereum and programmable finance
If Bitcoin is often described as “digital gold,” Ethereum can be seen as a platform for programmable money and assets. It was designed from the start to be more programmable than Bitcoin.
On Ethereum, developers can deploy smart contracts, self-executing pieces of code that run on the blockchain when specific conditions are met. This enables the creation of new blockchains or cryptocurrencies that rely on Ethereum’s infrastructure, decentralized applications for trading, lending, borrowing, and other financial activities, and the tokenization of assets, where ownership rights are represented as digital tokens.
In practice, Ethereum has become a core layer for what is often called decentralized finance (DeFi): markets, lending platforms, and other financial services that operate based on code rather than traditional intermediaries.
This “blockchain of blockchains” and applications is still young, but it illustrates how crypto can be more than just a speculative asset: it can also serve as infrastructure for a new type of financial system, where rules are encoded in software and enforced by a distributed network.
The crypto universe at a glance
Today, there are tens of millions of cryptocurrencies in existence. To make sense of this landscape, it is useful to group them into a few broad categories:
- Store of value assets aim to preserve purchasing power over the long term, e.g., Bitcoin, positioned as digital gold with a fixed supply.
- Smart contract platforms provide the infrastructure for decentralized applications and other tokens, such as Ethereum and similar programmable blockchains.
- Stablecoins aim to track the value of a fiat currency such as the US dollar or the euro. Used for payments, trading, and holding digital cash-like positions.
- DeFi tokens are associated with decentralized exchanges, lending protocols, and other on-chain financial services, often granting governance rights or access to specific features.
- Real-world asset tokens represent claims on assets from the traditional financial world, such as securities or other financial instruments.
Not all crypto assets are built to last. Many do not have meaningful user communities, real-world utility, or robust economic design. A practical filter for investors is to focus on network size, utility, and scarcity:
- Is there a large and active network of users and developers?
- Does the asset solve a real problem or enable valuable new use cases?
- Is its supply predictable and aligned with healthy incentives for participants?
“Most crypto assets lack the network size for long-term value; the filters that matter are network size, real utility, and scarcity.”
This helps avoid treating all crypto assets as equivalent, or, conversely, dismissing the entire space based on weaker projects.
Crypto as a response to financial fragility
Crypto has grown from a niche experiment into a market followed by both private and professional investors. Several trends illustrate this evolution: significant inflows into Bitcoin-focused investment products, a growing number of corporations using Bitcoin as part of their treasury diversification, and countries showing some level of direct or indirect exposure to crypto assets.
Although the overall crypto market is still small relative to global equities, bonds, or real estate, adoption is increasing. For many investors, the key question is no longer “Is crypto real?” but rather “What role, if any, does it play in protecting wealth against a fragile financial system?”
In this context, crypto can be viewed as a tool to diversify away from centralized, unlimited fiat towards decentralized, scarce digital assets. That does not make it risk-free, but it explains why it has become part of the conversation around long-term wealth preservation.
Crypto is here to stay, but it is not magic
Several conclusions stand out. Budget deficits and money creation are on an unsustainable path in many economies. Many traditional asset classes are richly valued, making diversification more challenging. Crypto has moved into the institutional arena, with growing use as a diversification tool and a strengthening role for Bitcoin as a potential long-term store of value. A decentralized digital economy is emerging, built on programmable platforms and new forms of tokenized assets. Not all crypto assets are created equal; focusing on network security, real utility, and sound incentives is essential.
“The real choice is not between ‘crypto or no crypto’, but between understanding these dynamics or letting them reshape wealth in the background.”
For investors and decision-makers, the most productive stance is neither blind enthusiasm nor blanket rejection. It is to understand what problems crypto is designed to address, what new risks it introduces, and how these elements fit, or do not fit, into their own long-term strategy for preserving and growing wealth.
This article is part of the IMD Tech Community initiative “Let’s rethink tech together” and reflects the work of a community of alumni who explore the impact of emerging technologies on business and society.
