Resolving the Intergenerational Prisoner’s Dilemma: The Inevitable Path of Nomadic Capital Toward Bitcoin
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Resolving the Intergenerational Prisoner’s Dilemma: The Inevitable Path of Nomadic Capital Toward Bitcoin
When the baby boomer generation collectively sells off assets, who will be the “next buyer” in the next round of asset price collapse?
Navigating Web3 tides with focused insightsBy Jeff Park
Translated by Saoirse, Foresight News
The International Monetary Fund’s (IMF) Global Uncertainty Index recently hit its highest level since its inception in 2008. A lack of clarity and coordination in policy and trade has significantly worsened market sentiment from its previous historical peak—and this trend is likely to intensify further, especially in the Middle East, where fragile, long-standing global alliances are being drawn into an unprecedented conflict.
Meanwhile, the accelerating adoption of exponential technologies like artificial intelligence is leaving experts and laypeople alike increasingly bewildered: How can productivity-driven deflation be reconciled with a credit-driven inflationary monetary system? Compounding the problem, private credit is suffering an epic collapse—having previously propped up this fragile capital supply chain by manipulating capital prices at the expense of liquidity.
Over the past week alone, we witnessed a series of events:
- Iran designated Mojtaba Khamenei as its new Supreme Leader, while U.S. crude oil prices surged nearly 40%, marking the largest weekly gain since 1983;
- AI company Anthropic sued the U.S. Department of Defense citing “supply chain risk”;
- BlackRock capped redemptions for its $25 billion direct-lending fund at 5%, even though investor redemption requests were nearly double that threshold.
No one can precisely predict how these complex issues will unfold—because they are unprecedented. (Notably, the above three events are not independent; I’ll elaborate on their interconnections shortly.) In moments like these, we must step back and re-center on fundamentals—not obsess over unknowns, but anchor ourselves in facts you can be absolutely certain of, and which directly cause the above events.
As Sherlock Holmes told Watson: “Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth.” Our task, therefore, is not to chase elusive unknowns—but to ground ourselves in what already exists and is indisputable.
Guided by this principle, I believe there are three certainties that will define the next decade of uncertainty—and their certainty will only grow more pronounced. By “certain,” I mean events with a 100% probability of occurring. The only true unknowns are their precise timing and, to some extent, their severity—but the catalyst for each is guaranteed to emerge within our lifetimes. Anchoring ourselves in these uncontested facts transforms widespread helplessness into a firm conviction about how to respond to the future.
Certainty #1: The global population pyramid is inverting—and every asset class built upon it will collapse
In 2019, a statement released by the World Economic Forum sent shockwaves through institutional consensus: “For the first time in history, the number of people aged 65 and older exceeds the number of children under age 5.” Seven years later—and following a devastating global pandemic—societies worldwide are already feeling the heavy pressure and adverse consequences of this trend. And this is just the beginning.
Global fertility rates are dangerously approaching—and in developed markets, have long since fallen below—the replacement level. Declining birth rates combined with aging populations will produce the highest dependency ratio in human history. Worse still, the gerontocratic ruling class in advanced economies will ultimately need to liquidate liquidity to fund ever-lengthening lifespans. The result is a massive intergenerational wealth transfer: financial assets accumulated by an entire aging cohort must exit capital markets en masse.
The scale of this capital is staggering: U.S. equity market capitalization stands at approximately $69 trillion (of which Baby Boomers hold over $40 trillion), while U.S. residential real estate adds another $50 trillion (despite Baby Boomers and earlier generations comprising less than 20% of the population, they hold $20–25 trillion in assets). Altogether, nearly $60–70 trillion in wealth must exit the capital asset system—while the next generation’s income pricing power continues to weaken and disposable wealth dwindles.
When this aging cohort is finally forced to sell assets, long-term asset deflation is all but inevitable.
At its core, the stock market is simply a reflection of demographic trends: markets rise when the cohort of savers accumulating assets steadily grows toward retirement. The catastrophic collapse of “private credit” is the most vivid illustration—a $2 trillion “ticking time bomb” embedded in pensions, endowments, and life insurance companies, masquerading as liquidity conversion for younger generations while operating, in effect, as near-fraud.
But once the younger generation realizes it is being cast as the “exit liquidity taker” for its elders, it will choose not to participate. No one voluntarily buys an asset destined for long-term decline. This explains why the Trump administration aggressively promoted children’s investment accounts, why the U.S. is pushing hard for stock tokenization (to enable foreign capital to absorb U.S. equities more easily), and why registered investment advisors (RIAs) are widely adopting automated model portfolios—without asking the core question: “Why?”
All these measures aim to delay the inevitable: unless young people, foreign capital, or machines are compelled to step in, there will be no buyers when Baby Boomers sell assets at inelastic prices. The design of the Trump children’s account makes this explicit: it prohibits any diversification, explicitly banning bonds, international equities, and alternatives—allowing only U.S. stock index exposure. At age 18, the account converts into an Individual Retirement Account (IRA) with steep redemption penalties—contrasting sharply with standard Uniform Transfers to Minors Act (UTMA) accounts, which permit full, unrestricted withdrawal upon adulthood. Clearly, this is not a wealth-building tool for children; it is a one-way, closed conduit spanning over 40 years—intentionally or not—designed to turn an entire generation of young people into passive “liquidity takers” for the prior generation.
This phenomenon will be even more visible in real estate—the epicenter of the largest asset bubble in history. One generation has deliberately hoarded fixed-supply assets for decades, using duration effects to decouple home prices entirely from underlying community economic productivity. For most residential and commercial real estate (excluding high-quality assets operating within alternative economic systems), “affordability” is already a fiction. A generation whose wages have consistently failed to keep pace with housing prices will not buy homes at current valuations. For the fortunate, many properties will pass naturally to children; without heirs, properties will eventually be sold into a market with structurally shrinking numbers of buyers and households forming. Again, the math is brutal and unavoidable: substantial real estate deflation is not a possibility—it is a certainty.
To accelerate this liquidity event, the shift of real estate from investment asset to consumption good will compound with rising property taxes—tying home values ever more tightly to government spending inflation, including public schools, social services, municipal infrastructure, and the broader trend of service costs outpacing goods costs. Fiscal pressure alone will force unsustainable levels of selling. New York City Mayor Mamdani’s push to raise property taxes is not an outlier—it signals the arrival of the “inert capital asset tax” era, a trend especially pronounced in cities where extreme wealth inequality has rendered the status quo politically untenable. This leads us to my second certainty.
Certainty #2: Wealth inequality will reach a breaking point—and wealth taxation will become the unanticipated answer
The above demographic challenge is fundamentally a vertical collapse: the population pyramid slowly inverts, the base shrinks, and the weight of the elderly dependent cohort becomes unsustainable. Beyond this vertical demographic collapse, however, lies an even more alarming horizontal fissure—income inequality.
When headlines declare “the top 10% of the global population holds 76% of global wealth” (source: UN World Inequality Report 2022), we must grasp a crucial distinction: this is not a story of some countries getting rich first while others lag behind—it is happening *within* every country globally. Income inequality is widening everywhere—and accelerating across all measurable timeframes.
More precisely, the issue is not merely income inequality—it is *wealth* inequality. Never before in human history has such a large share of wealth been concentrated among the top 1% of the population. In the U.S., for example, the net worth share held by the top 1% has risen continuously and now approaches one-third of national wealth.
The distinction between income and wealth is critical. Income is a transactional concept—“flowing money”—a market-based measure of productivity. Wealth is not. Non-capital wealth is “static money”: it lacks intrinsic productivity and, in a credit-driven zero-sum game, slows the velocity of money required for healthy economic functioning. When wealth is concentrated as highly as today, it stops circulating—and the velocity of consumer spending needed to sustain broad economic activity quietly suffocates.
Under these conditions—and absent significant productivity growth to generate new resources—wealth taxation, despite its controversy, will inevitably emerge as the fiscal nihilism’s logical conclusion. The reason is simple: the only viable mechanism to rebalance this structure is to tax wealth itself—regardless of how crude its design or how flawed its logic. A wealth tax can be viewed as the mirror image of social security: the former extracts funds from the bottom to subsidize survival; the latter extracts funds from the top to sustain survival. Both are levies on unrealized value—the sole difference lies in direction: vertical (from youth) versus horizontal (from the wealthy).
The implementation of wealth taxation has already begun. On February 12, 2026, the Dutch House of Representatives passed a landmark bill mandating a flat 36% annual tax on the unrealized gains of stocks, bonds, and cryptocurrencies—regardless of whether those assets have been sold. The bill now awaits Senate approval, and the parties supporting it hold a majority—making passage virtually assured. Whether this policy is morally justified, mathematically sound, or legally enforceable is irrelevant—those preoccupied with such questions miss the larger point entirely. The truly pivotal question is simple yet profound: What happens when other countries follow suit?
Consider capitalism’s birthplace and last bastion—the United States. A New York Times poll on public attitudes toward wealth taxation shows near-uniform support across all demographic groups—except college-educated men (a group whose population is rapidly shrinking).
This is the crux of capital’s “citizenship.” Capital account liberalization is widely assumed to be an inherent feature of the modern world—but vulnerable populations know well that capital can be restricted anytime a nation chooses, as demonstrated by China, Russia, and others. Historically, the problem was “defection”: if a single country imposed a wealth tax, capital would simply flee to other jurisdictions. But as global fiscal nihilism intensifies, political will converges around the sole remaining option—coordinated multilateral arrangements become inevitable. Tax havens that long profited from the prisoner’s dilemma will no longer be permitted to sit out.
Following the Netherlands’ decision, the EU is actively coordinating a tax framework designed to prevent intra-member-state capital flight. By mid-century, capital’s global passport will be revoked—replaced by a “Schrödinger visa” simultaneously valid and invalid in different regulators’ eyes. Local capital restrictions will only increase demand for “external capital” capable of bypassing compliance layers. Welcome to the hard-currency-backed price-species economic renaissance.
Within the framework of David Hume’s 1752 essay “Of the Balance of Trade,” modern investors long treated “external capital” as gold, Bitcoin, or similar assets—stateless, jurisdictionless, sovereign-free. But four centuries later, a new class of “external capital” is emerging—one that will fundamentally redefine comparative advantage. It’s time to write a new treatise on international relations: “On the Balance of Intelligence.”
As Hume observed, trade surpluses and gold flows determined relative national strength; today, the new determinant of comparative advantage will be concentration of productive AI infrastructure—who controls compute, who governs data, who sets the model rules governing all other systems. Capital will flow toward intelligence dominance as it once flowed toward manufacturing dominance. Nations, institutions, and individuals who grasp this trend earliest will define the new wealth hierarchy. This brings us to my third certainty.
Certainty #3: Artificial intelligence will destroy labor’s relative value—and redefine capital value for an intent-driven economy
Karl Marx, in Capital, described capital as “dead labor, which, vampire-like, only lives by sucking living labor, and lives the more, the more labor it sucks.” This famous line underscores the socialist view: capital, in the form of accumulated labor, perpetually increases by consuming workers’ living labor.
Yet Marx made a critical error in his analysis: he assumed capital is inherently inert—requiring constant human labor to profit. But with the rise of credit—and now the explosion of AI—we stand on the cusp of a new paradigm: the “vampire” is not only fully autonomous but can profit without human labor at all—by consuming energy alone. As shown in the chart below, the decades-long trend of rising capital income shares and falling labor income shares has long been brewing—and AI will push this trend past the point of no return.
Since 1980, labor’s share of U.S. GDP has fallen from roughly 65% to below 55%—and this occurred *before* the widespread adoption of large language models (LLMs). Goldman Sachs estimated in 2023 that generative AI could automate the equivalent of 300 million full-time jobs.
In other words, AI is not merely capital-intensive—it is labor-destructive. Its rise will permanently alter the foundational economic principles of society, reshaping the irreversible relationship between capital and labor. More specifically, when labor costs converge with computing costs, a new “capital war” will erupt globally—demanding unprecedented government subsidies, aggressive industrial policy, and fiscal intervention. In this world, capital reigns supreme: asset ownership becomes the sole barrier between dignity and permanent underclass status. This is precisely what the IMF forecasts: in an AI-dominated economy, the federal tax base will shift from labor income to corporate income and capital gains taxes.
Yet capital itself will be redefined—because asset ownership will no longer be confined to financial assets. The vast AI industry depends on another input even more precious and irreplaceable than pure energy: data. Specifically, the digital footprints you leave daily provide the context for model inference and learning. The world is moving toward a new paradigm: human thought, behavior, instructions, preferences—and especially *intent*—will carry immense value. When intent itself becomes capital, an entirely new economic order emerges: asset ownership will take on a strange “non-custodial” form—detached from the familiar KYC/AML frameworks of traditional financial institutions. Intelligent agent systems are already equipped with cryptocurrency wallets, autonomously paying for compute, APIs, and data. For a world where value must flow seamlessly between intelligent agents and preferences are transacted explicitly, this is an inevitable reality—one where labor and capital exist in a superimposed “Schrödinger state.”
Historically, financial assets have always resided clearly within regulatory boundaries defined by agencies like the SEC, CFTC, FINRA, and FASB. But as assets evolve into “active” forms—where your data footprint serves as collateral and intent becomes monetizable output (via consumption-based pricing models delivered through open, API-native products embedded in context)—AI systems will blur regulatory boundaries from every direction. The FCC has jurisdiction because your cognitive information travels via spectrum; the FTC has jurisdiction because intent collection falls under consumer protection; the DoD has jurisdiction because data sovereignty is a national security issue.
In other words, this superposition effect doesn’t stop at the asset level—it propagates upward across the entire regulatory architecture. When no single agency can clearly demarcate the boundaries of a “financial asset,” the definition of money—who issues it, who protects it, who seizes it—becomes the most contested geopolitical issue of the century.
Welcome to the Age of Intelligent Money.
Three Certainties, Two Convergences, One Conclusion
If you’ve read this far, you may feel unsettled—or perhaps find yourself slipping back into overwhelming uncertainty. But remember: the entire purpose of this piece is to find clarity. Let us reaffirm the central conclusion: demographic collapse, wealth inequality, and AI-driven labor displacement are forces that *will* happen. They are not isolated risks to weigh and hedge separately—they are logically converging simultaneously. The population pyramid collapses vertically, while the wealth distribution tears horizontally—and a technology revolution that favors capital exclusively amplifies both.
Many investors attempt to manage this uncertainty with localized solutions: rotating assets here, hedging there, betting on AI infrastructure themes, or clinging blindly to crypto. The most seductive—and most likely to lull traditional investors into complacency—is the techno-optimist “escape pod”: AI-driven productivity gains will rapidly expand the wealth pie enough to offset demographic collapse. This sounds plausible—but it’s precisely the kind of seemingly sophisticated logic that distracts from the core issue.
Throughout human history, productivity gains have never been fast or fair enough to prevent inequality-driven political and social fragmentation. The Industrial Revolution didn’t prevent labor uprisings—it ignited them—even as it created unprecedented aggregate wealth. Crucially, AI is not a neutral productivity multiplier: by its very architecture, it is a *capital concentrator*. Every unit of productivity it creates accrues first—and most durably—to those who control compute, data, and models. Optimists don’t deny the pie will grow; they’re wrong about *who gets the slices*—and that is the heart of the entire debate.
When you zoom out far enough to see these truly irreversible global phenomena, conviction about direction unexpectedly sharpens:
- Global population aging and contraction—and worsening demographic conditions—are 100% certain;
- Wealth inequality will widen to trigger global capital constraints—both cross-border and domestic—is 100% certain;
- AI will structurally favor capital, spawning a new class of transitional capital unseen in the global economy—is 100% certain.
Most critically, the shared defining feature of all three points is one word: *global*. Intergenerational demographics, asset allocation, and capital costs have never been so highly correlated—and this correlation is intensifying. Moreover, this correlation spans not only space but also *time*—because demographic wealth evolution is unidirectional and irreversible. This means the convergence is not just global—it is *synchronous*.
Together, this forms what I see as the central collective negotiation problem of the modern century: the intergenerational exit liquidity prisoner’s dilemma. It poses these questions:
- When the younger generation perceives government mandates as “bailouts for elders,” will they voluntarily participate in “U.S. capitalism’s ownership model”?
- When billionaire peers pivot to “tax-efficient” planning, will ultra-high-net-worth individuals voluntarily shoulder high tax burdens?
- When profit-maximizing competitors ignore capital costs and expand relentlessly, will AI firms voluntarily slow down?
A Nash equilibrium will emerge: all participants will rationally choose defection—the dominant strategy regardless of others’ choices—because the cost of inaction is too great. Thus, at the critical inflection point, everyone will rationally seek exit liquidity simultaneously.
This Faustian liquidity trade cannot be treated as a potential risk—or a tail-risk requiring modeling and hedging. It must be recognized as the most predictable large-scale coordinated event in the history of human capital markets. Some will say: in deflationary environments, hold nominal-yielding instruments like bonds—or ride the AI stock wave. Perhaps. But my core principle is simpler and more structural: hold assets that won’t make you someone else’s exit liquidity taker. Under this framework, the assets you should hold *least* are, in order: real estate, bonds, U.S. equities. These are duration-manipulation tools—whether intentionally designed or not, they represent the largest intergenerational wealth transfer in history.
Conversely, your ideal assets should satisfy three inverse criteria:
- Currently held at the lowest demographic penetration—but poised to achieve the highest future penetration;
- Most likely to serve as a jurisdictionless safe haven when capital liquidity is heavily taxed, restricted, or seized;
- Closest to the capital form that autonomous intelligence will use seamlessly—replacing human labor in productivity functions without intermediaries.
When the Ottoman Empire breached Constantinople’s walls in the 15th century, the Byzantine merchant class lost *all* assets denominated in imperial credit: land, titles, sovereign debt—none survived. But young, enterprising scholars and merchants carried portable wealth westward to Florence—manuscripts, gold, knowledge—igniting what would later be called the Renaissance.
Among them was a young Byzantine scholar named Johannes Bessarion. Born in Trebizond on the Black Sea in 1403, he fled Constantinople carrying crates of irreplaceable Greek manuscripts—containing nearly the entirety of ancient intellectual heritage. He became the greatest supplier of books and manuscripts to Latin Europe in the 15th century—and thereby created one of the earliest “information technologies”: the Biblioteca Marciana—the first open-source knowledge repository (i.e., public library) in Latin European history. Housed in Venice, these volumes became the direct source material for Aldus Manutius, who printed Aristotle’s complete works and dozens of Greek classics—sparking the printing revolution, which in turn catalyzed the Reformation, Scientific Revolution, and Enlightenment. Bessarion’s portable, autonomous, jurisdictionless capital—carried across five centuries—ultimately gave birth to Western civilization.
Capital that can flow across time and space survives; capital that cannot, perishes.
This leads us to our final conclusion—the only radical decision worth considering amid the traps of conventional options:
What you truly need to hold is *nomadic capital*. This capital moves freely across intergenerational demographics, political borders, and AI-native ecosystems—and bypasses money’s “Strait of Hormuz.” In the 21st century, nomadism is digital. Specific investment vehicles vary by individual, and the Radical Investment Theory offers a workable framework: allocate 60% to compliant assets and 40% to anti-fragile assets. But if you rigorously apply the three criteria above—holding assets young people will ultimately need, holding assets governments struggle to reach, holding assets actually tradable within autonomous economic systems—the outcome ceases to be a forecast—it becomes inevitable. Uncertainty crystallizes into certainty.
After all, historically, only one disruptive asset has satisfied all three conditions from its inception—from the first line of code. For the action-oriented, the next step is already simple.
Everything else is merely a matter of timing.
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