E06 - The Fiduciary Letter: The “Early” Premium

Bitcoin is not behaving like gold (yet) and that gap is the opportunity.

I’m seeing two realities at once. On the one hand, my WhatsApp is busy. I've just placed my orders for new stock after selling out of Hardware Vaults for long-term bitcoin custody in record time. On the other hand, the broader mood is unsettled. Conversations in the business communities I'm in have a different tone. Decisions are taking longer. Capital allocators seem stuck in limbo, waiting to see what happens next.

That mix is the signal. Bitcoin adoption is moving forward with smaller investors, even while legacy markets default back to what feels familiar.

When confidence gets thin, institutional capital does not negotiate. It moves toward what is deeply liquid, historically understood, and politically permitted.

That is why gold is acting like gold again. It's sucking in new liquidity in the same way Bitcoin has done in previous cycles. Bitcoin is not doing that this time, or at least not yet.

Skeptics will point to this divergence and call the thesis broken. The more honest read is simpler. The thesis was never that Bitcoin is gold today. The thesis is that Bitcoin is becoming money, and monetization is not a straight line.

I wrote about this in the vitally important review of Saifedean's talk about the liquidity movements as Bitcoin awerness grows: https://www.simplb.co.za/bitcoins-future-adoption/

Understanding the difference between an incumbent monetary asset and a contender undergoing adoption is the key to making sense of what we are seeing.

Gold is the incumbent.

Gold has a multi millennia head start. It is held by central banks as a hedge against the failure of other central banks. It has deep liquidity, universal recognition, and a clear place in institutional policy. When the world gets uncertain, capital retreats to what it already understands. Gold is doing exactly what it has always done: preserve purchasing power with lower volatility.

Bitcoin is the contender.

Bitcoin is new. It has superior monetary properties on paper and in code: absolute scarcity, portability, divisibility, and verifiability. It is also still in the adoption phase where the market is arguing about what it is.

That “identity debate” matters more than people realise.

Gold is already classified. Bitcoin is still being classified, still being integrated, still being risk modelled, still being incorporated into mandates, still being translated into the language fiduciaries are allowed to use.

This is where the mismatch comes from.

Gold behaves like a defensive asset during fear events because it is already widely accepted as one. Bitcoin often behaves like a liquidity asset because marginal buyers are still dominated by participants who respond to liquidity conditions, not to tradition.

That sounds like a weakness until you see what it really is. Bitcoin is being filtered through liquidity because adoption is incomplete.

A practical way to frame this:

• Gold is where capital hides.

• Bitcoin is where capital graduates, once the pipes and permissions are in place.

Calling Bitcoin “early” is not a way to excuse the lacklustre price action. It is a way to highlight again what stage we are in. Gold is already money in the institutional world. It sits inside policy documents, reserve frameworks, and risk systems that have been refined over decades.

Bitcoin is still earning its place in that same machinery. That process is slow, procedural, and often boring. It involves custody standards, audit treatment, risk committees, legal sign-off, mandate updates, and reputation management. Until that work is done, Bitcoin will not consistently behave like the asset it is becoming.

As we continue to note, volatility is the cost of the adoption phase.

If markets price in probabilities, Bitcoin’s current price is not yet reflecting that “Bitcoin is definitely the global monetary standard.” It is more showing the price of “Bitcoin might become that, and here is the market’s current probability distribution.”

When the market is uncertain, it reprices the odds constantly. Those repricings show up as wide price ranges. I've been learning that that is what we see as volatility.

Still Early

When Bitcoin becomes universally treated like gold by pensions, insurers, sovereign funds, and bank balance sheets, the upside compresses. The thing everyone waits for, price stability, arrives after the messy part is over. The price may just be astronomical by then.

No one gets the stability of a mature monetary asset and the asymmetric upside of a young one at the same time. Markets do not hand out free lunches. They simply rotate who is paying for them.

Gold primarily grows when fear rules the market. It's a Fear instrument. War, instability, political uncertainty, and currency credibility crises tend to push capital toward gold because gold is the accepted trench. It is familiar, liquid, and institutionally permitted.

Bitcoin has often been a liquidity instrument. When broad money expands, when credit conditions loosen, when risk appetite returns, Bitcoin tends to react first and harder. When liquidity tightens, Bitcoin tends to get hit first and harder. This is not because Bitcoin is broken. This is because the marginal buyer is still more liquidity sensitive than policy anchored.

Institutions do not move at the speed of social media. They move at the speed of policy committees. A fiduciary does not ask, “Do I like Bitcoin?” A fiduciary asks, “Can I hold this within mandate, custody, audit, tax, reporting, and governance constraints?”

Those constraints are the real adoption curve if Bitcoin's NGU is the goal. Price follows them, not the other way around.

But where does the story flip? There is a technical detail that matters more than almost anything else in this conversation.

Gold supply is elastic. If gold’s price rises enough, more capital is deployed to extract it. Marginal projects become viable. Production responds. Supply growth may be slow, but it responds to price.

Bitcoin supply is inelastic. Price can go to absurd numbers and the protocol does not produce one extra bitcoin. The issuance schedule is fixed. The cap is fixed. The scarcity is not a narrative. It is enforcement.

This is why Bitcoin is a different category of asset. In fact, at the time of writing there are only just over 1,019,234 bitcoin left to mine.

In an environment of monetary expansion, elastic assets tend to leak value through increased supply. Inelastic assets concentrate value because demand can only express itself through price.

This is also why Bitcoin does not need the world to “trust” it in the way it trusts institutions. The rules do not change because a committee voted. The rules only change if a global network chooses to run different software, and that is intentionally hard.

Scarcity is not a marketing slogan. It is a constraint.

A sober hierarchy: gold, silver, bitcoin

People often group gold, silver, and bitcoin under the label “hard assets” and then get confused when they behave differently, because they play different roles.

Gold is primarily a wealth preservation asset: it carries minimal counterparty risk, but it comes with real physical friction since it is heavy, hard to transport, and highly visible, and history shows that when states get desperate they target what is easy to see and hard to move.

Silver has an important monetary history, but in modern markets it tends to trade more like an industrial input than a monetary standard, which makes it more cyclical, more volatile, and less monetarily dense. Many market commentators are openly claiming Silver's price rise is purely speculative.

Bitcoin is digital bearer capital: the cleanest engineered scarcity we have, designed to be held and moved without permission, which immediately pulls custody, governance, and inheritance into the conversation, because for a bearer asset those operational realities are not a side note, they are the whole game. Not your keys. Not your coins.

Bitcoin is still superior to Gold, especially for the information age. What is missing is Institutional knowledge and the technical frameworks to allow adoption at scale.

Sideways markets frustrate people because they confuse entertainment with progress. A flat price can hide massive structural change and that is where my focus has been throughout the past eighteen months.

Bitcoin’s pipes are being built in plain sight. Access rails have improved. Custody standards are being formalised. Accounting and governance conversations are evolving. Corporate treasury adoption is being implemented by my clients.

Sovereign level discussions are no longer fringe. The language has shifted from “Should this exist?” to “What are we doing with Bitcoin". Next comes, "How do we hold this responsibly?”

Most institutional adoption happens quietly. Committees do not announce they are studying something for 18 months. They simply reappear later with a policy update and a small allocation. Small allocations become larger allocations once the first one survives a full reporting cycle without drama.

That is how “too early” turns into “everyone is late.”

The chop is often the market doing its real work: transferring supply from impatient hands to patient hands while infrastructure catches up.

Fiduciary: Managing other people's money.

I titled this edition “The Fiduciary Letter” because this moment is not really about traders. It is about stewards. Fiduciaries of family wealth, personal wealth, and company balance sheets are sitting in a narrow window where Bitcoin is investable, accessible, and still not fully absorbed into institutional policy.

The large institutions will arrive, but they will arrive with committee language, procurement cycles, mandated custodians, and career risk priced into every decision. That is the slow machinery Bitcoin is still moving through. Private fiduciaries do not have to wait for the machinery to finish.

You can do the work now: education, governance, custody architecture, approvals, documentation, and a clear operational plan. That is exactly what I am doing with a growing number of families and companies already, not as a trade, but as a long-horizon decision about monetary integrity and long-term purchasing power.

A fiduciary posture is not about hype. It is about preserving purchasing power over long horizons and doing it within governance constraints. In a world where fiat supply expands over time, holding zero exposure to scarce assets is not neutral. It is a position. Gold protects what you have. If I am right again, Bitcoin gives you exposure to a new monetary standard, with the catch that it comes with operational responsibility: custody, key management, governance, and inheritance planning.

That responsibility is not a drawback. It is the point. A bearer asset cannot be 100% outsourced without reintroducing counterparty risk.

This is why the opportunity is not “Bitcoin will pump.” The opportunity is that the market still prices Bitcoin as a contender, not as an incumbent. That gap is the early premium. It rewards the people who are willing to do the unglamorous work before the institutions have permission to move.

For a deeper explanation of the adoption curve and what has to happen before Bitcoin behaves more like gold, see: www.simplb.co.za/bitcoinsfutureadoption

Don’t Trust. Verify.

James Caw

Founder and Bitcoin Strategist | SimplB

www.simplb.co.za

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SimplB (Pty) Ltd is a Juristic Representative and James Caw is a supervised Representative of CAEP Asset Managers (Pty) Ltd FSP No: 33933, an Authorised Financial Services Provider. Nothing in this newsletter should be construed as financial advice. Before taking any action speak to your financial advisor or book a call with James at www.simplb.co.za/meet.