Today, bonds yield very little, and as we've seen in recent weeks, they can decline in value rapidly with small increases in the interest rate. You can lose a lot of money buying bonds.
Stocks are at all-time highs even though the economy isn't doing so well and many are unemployed. Are stocks a safe store of value right now?
Companies are shifting to hybrid work-from-home models that require less office space. And not just tech companies, yesterday Target said they're not renewing the lease on an entire building in Minneapolis because of more flexible hybrid work. Is real estate a safe store of value?
As trillions of borrowed and printed dollars and euros were pumped into economies the last year, gold was the worst performing asset of them all. So is gold a safe store of value?
And inflation isn't the only enemy of wealth. Political disintegration destroys wealth much faster, just look what happened to the ruble after the collapse of the Soviet Union. The probability of that happening in a major western nation is low, but not zero, and higher now than 10 years ago.
So if you're a high net worth individual looking at the twin threats of inflation and political disintegration, exactly how do you protect your wealth?
It's easy to see how Bitcoin might be getting a 5% allocation from a lot of family offices right now.