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The latest AVI Index, which aggregates sentiment among independent wealth managers in Switzerland, signals caution. After a strong year for digital assets, nearly 30 percent of Swiss independent asset managers rated crypto investments as overvalued.

Monetary Seismographs

While that view may appear reasonable, it ultimately misses the point. Over time, such evaluations rely on a standard of measurement that has long been distorted.

Valuation depends on the yardstick, and when that yardstick keeps shrinking, every number loses its meaning.

«Neither Bitcoin nor gold can truly be overvalued as long as their supply remains limited.»

What does »overvaluation» mean in a monetary system that constantly devalues itself? Neither Bitcoin nor gold can meaningfully be considered overvalued as long as their supply is finite and the denominator – fiat currency – keeps fraying. Both act as monetary seismographs, indicating how severely the monetary base is being eroded and where confidence in the system is dissolving. Both are finite goods, measured against a backdrop of monetary infinity.

At a Turning Point

Deglobalization, geopolitical fragmentation, and fiscal excess are realities. Yet they do not necessarily oppose, but instead support, assets that operate independently of political influence. The shift toward fiscal dominance, for example, is not a passing anomaly but a trend that has become increasingly entrenched in recent years.

«Gold is regaining weight because it escapes political interference. Bitcoin follows the same logic.»

For decades, a system built on cheap credit, deficit financing, and boundless trust in U.S. Treasuries has underpinned the world economy. That regime now stands at a turning point. The consequence is not a return to gold fetishism, but to neutrality. Gold is gaining weight again because it resists political manipulation. Bitcoin follows the same logic – mathematically limited, globally transferable, transparent, and immune to debasement. Both stand beyond the illusion of debt. Both attract capital seeking stability, which can no longer be found in government bonds.

Bitcoin’s Tiny Share Despite Omnipresence

While the yardstick continues to shrink unchecked, a glance at the investment universe reveals that Bitcoin remains tiny in global terms despite its media omnipresence. With a market value of around USD 2.3 trillion, it accounts for less than 0.3 percent of global wealth – smaller than silver (USD 2.8 trillion) and more than ten times smaller than gold (USD 28.6 trillion).

It is remarkable that an asset ranking among the most liquid and globally traded markets in the world is still treated as a niche. Far from being overweight, Bitcoin looks more like an emerging asset class that is steadily establishing itself and gaining macroeconomic significance.

Higher Upside Potential Than Gold

While gold has been in a remarkable uptrend for a decade, with its price quadrupling since 2013, the ratio between Bitcoin and gold has moved to the lower end of its long-term growth curve. The gold rally reflects justified distrust of fiat money – but also bears signs of exhaustion.

As a result, Bitcoin appears moderately valued in relative terms, with greater upside potential and arguably a lower risk profile than gold. In this context, the label of overvaluation seems misplaced.

Change at Lightning Speed

Despite its superior market capitalization, gold is seeing no stronger capital inflows than Bitcoin. ETF flows for both assets are frequently on par – a sign that Bitcoin, though younger and more volatile, is structurally gaining market share.

Crypto ETPs have now surpassed a quarter trillion dollars in assets under management – an institutional inflow in record time, unmatched by any previous phase in the history of digital assets, and at a pace rarely seen even in established markets.

This development is pivotal: unlike gold, whose valuation largely rests on historical acceptance, Bitcoin represents a young and expanding market whose institutional integration is now entering its inflection phase.

«Demographic shifts are likely to fill Bitcoin’s sails with further wind.»

A recent Bank of America survey shows that most professional portfolios still have minimal digital allocations. With every new wave of regulation, every ETF approval, and every integration into institutional portfolios, Bitcoin moves closer to the status of a recognized global hard asset. The overvaluation narrative simply doesn’t hold up against this backdrop.

State-Level Adoption Still Nascent

The potential at the sovereign level remains largely untapped. While BRICS countries are massively increasing their gold reserves and reducing their holdings of U.S. Treasuries, no major economy yet holds substantial Bitcoin reserves. National allocation thus remains in its infancy.

Meanwhile, demographic change is set to further accelerate Bitcoin’s momentum. The largest wealth transfer in modern history – from the baby boomer generation to younger, digitally native heirs – is already underway. Over half of U.S. private wealth is still held by those who grew up with government bonds.

«By its function alone, there’s much to suggest that Bitcoin is fundamentally undervalued.»

Their successors, however, resonate more with code than with coupons. They are familiar with blockchain, tokenized assets, and global digital markets.

Bitcoin today does not appear overvalued. Judging by its function, diffusion, contemporary relevance, and its role in the emerging monetary system, much points to the conclusion that Bitcoin is not structurally overvalued – but fundamentally undervalued.

Dominic Weibel is Head of Research at Bitcoin Suisse.

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