River’s latest newsletter makes a measured case for hard assets, framing bitcoin not as a replacement for stocks but as a complement that protects against the one risk equities and bonds can’t shield you from: inflation.
Why stocks alone are a risky bet
The piece points out that anyone who started investing after 2009 has only known a market that goes up, with the S&P 500 returning roughly 15% a year and recovering from every dip within 16 months.
River warns this is not normal:
“It’s the best sustained run in modern history, and it has trained an entire generation to believe that stocks always recover quickly.”
The report highlights the forward price-to-earnings ratio, currently at 22.5, as a warning sign:
“If history is any indication, stocks this expensive have usually delivered low or negative returns over the following decade.”
The real villain is inflation
River argues the bigger threat is inflation eating away at gains.
In the 1970s, U.S. stocks lost nearly half their value over 13 years after adjusting for inflation, while gold rose 5X.
The newsletter ties this to government finances:
“The easiest way for the government to reduce its debt burden is through inflation. Inflation is the one way out that requires no vote and no campaign.”
With U.S. debt near $40 trillion and $1.4 trillion in annual interest payments, River sees that pressure building again.
Why bitcoin protects purchasing power
Stocks and bonds share the same flaw, the report says, because neither is scarce. River contrasts that with gold and bitcoin:
“Bitcoin’s scarcity is absolute. Its supply is mathematically fixed at 21 million coins, forever.”
River notes that over the past decade, putting 10% of a portfolio into bitcoin would have boosted returns nearly 4X, while a 20% gold allocation raised returns ~50% and lowered volatility.
