Riot Platforms VP of Research: Bitcoin can be understood as a "reservoir" of global excess capital.

Pierre Rochard, VP of Research at Riot Platforms, wrote that Bitcoin can be understood as a "savings reservoir" for global excess capital: when interest rates are low, liquidity is abundant, and real-world investment opportunities with high expected returns on investment (ROIC) are scarce, savings capital flows into Bitcoin—due to its absolute scarcity as a global digital open-source network with a fixed supply of 21 million coins. Over time, more and more Bitcoins are held by long-term holders, corporations, exchange-traded funds (ETFs), and government agencies, who view BTC as a strategic reserve asset rather than a trading asset. This makes Bitcoin's effective circulating supply highly rigid: new demand is mostly reflected through increases in its fiat-denominated price, rather than through the entry of new tokens into the market. When market conditions reverse (interest rates rise or risk appetite declines), speculators will choose to sell, but a large number of long-term savings holders will not follow suit; most of the capital flowing into the market will remain dormant. This supply-demand asymmetry creates the "ratchet effect" of Bitcoin's exchange rate: deep corrections are common, but the bottom after a crash is often higher than the low of the previous cycle.