Breaking the Intergenerational Prisoner's Dilemma: The Inevitable Path of Nomadic Capital Bitcoin

Written by: Jeff Park

Translated by: Saoirse, Foresight News

The International Monetary Fund’s Global Uncertainty Index (IMF GUI) recently hit its highest level since its inception in 2008. The lack of clear direction and coordination in policy and trade has significantly worsened market sentiment since the previous all-time high, and this trend is likely to intensify — especially in the Middle East, where fragile old global alliances are being drawn into an unprecedented conflict.

Meanwhile, the rapid proliferation of exponential technologies like artificial intelligence is leaving both experts and ordinary people increasingly confused: how should a deflation driven by productivity be reconciled with a credit-driven inflationary monetary system? To make matters worse, private credit is experiencing an epic collapse, having previously supported this fragile capital supply chain by manipulating asset prices at the expense of liquidity.

In the past week alone, we have witnessed a series of events:

Iran designated Mojtaba Khamenei as the new Supreme Leader, while US crude oil prices surged nearly 40%, marking the largest weekly increase since 1983;

AI company Anthropic sued the U.S. Department of Defense over “supply chain risks”;

BlackRock set the redemption limit for its $25 billion direct lending fund at 5%, while investor redemption demands are nearly double that percentage.

No one can precisely predict the trajectory of these complex issues because they are all unprecedented (notably, these three events are interconnected, which I will explain in detail later). At such moments, we need to step back and clarify the core: not obsess over the unknowns, but anchor ourselves in the facts that are certain and directly causative of these events.

As Sherlock Holmes told Dr. Watson: “When you have eliminated the impossible, whatever remains, however improbable, must be the truth.” Therefore, our task is not to chase elusive unknowns but to root ourselves in those undeniable, existing facts.

With this approach in mind, I believe there are three major truths — whose certainty will only become more apparent in the uncertain decade ahead. By “certain,” I mean these are events with a 100% probability of occurring. The only real unknowns are the timing and, to some extent, the severity, but each catalyst is destined to appear within our lifetime. Anchoring ourselves in these indisputable facts can transform a sense of helplessness into firm confidence about how to respond to the future.

Truth One: The global population pyramid is reversing, and all asset classes built upon it will collapse

In 2019, a statement from the World Economic Forum caused a seismic shift in institutional consensus: “For the first time, the number of people over 65 exceeds those under 5.” Seven years later, after a devastating global pandemic, societies worldwide are already feeling the heavy pressures and consequences of this trend — and this is only the beginning.

Global fertility rates are dangerously approaching below-replacement levels, especially in developed markets where this threshold has long been crossed. The combination of declining birth rates and aging populations will create the highest dependency ratios in human history. Even worse, the aging elite in developed countries will eventually need to monetize liquidity to fund their increasingly long lives. This results in a massive intergenerational wealth transfer: the financial assets accumulated by an entire aging generation must exit the capital markets en masse.

The scale of this capital is staggering: the U.S. stock market alone is worth about $69 trillion (with the Baby Boomers holding over $40 trillion), and U.S. residential real estate adds another $50 trillion (despite Boomers and earlier generations comprising less than 20% of the population, they hold assets exceeding $20-25 trillion). In total, roughly $60-70 trillion of wealth must exit the capital asset system, while the next generation’s income-generating capacity is weakening, and their disposable wealth is scarce.

When this aging cohort is forced to sell assets, a long-term asset deflation is almost inevitable.

The fundamental logic of the stock market reflects demographic trends: as the savings and asset-holding population grows and approaches retirement, markets tend to rise. The catastrophic collapse of “private credit” is a stark example — a $2 trillion “time bomb” lurking within pension funds, endowments, and life insurers, which pretend to convert liquidity for the young but are in fact nearly fraudulent.

Once the younger generation realizes they are becoming “exit liquidity takers” for their elders, they will choose to stay out of the market. No one will voluntarily buy assets that are in a long-term decline. This is precisely why the Trump administration promoted child investment accounts, why the U.S. is actively pushing for stock tokenization (to make foreign capital easier to access U.S. equities), and why registered investment advisors (RIAs) are adopting automated portfolios but avoiding core questions: “Why are we doing this?”

All these measures aim to delay the inevitable: when the Baby Boomers sell non-elastic priced assets en masse, unless forced to accept new buyers like young people, foreign capital, or machines, the market will have no bids. The design of Trump’s child accounts is revealing: they prohibit diversification, explicitly ban bonds, international stocks, and alternative investments, and only allow U.S. stock index allocations. After age 18, the account converts into an IRA with hefty redemption penalties — starkly contrasting with standard UTMA accounts, which allow free redemption upon adulthood. Clearly, this isn’t a wealth-building tool for children but a one-way, 40-year-long closed channel designed, intentionally or not, to turn an entire generation of young people into passive “liquidity takers” for their predecessors.

This phenomenon will be even more pronounced in real estate, which is at the epicenter of the largest asset bubble in history. Decades of deliberate accumulation of fixed supply assets, leveraging duration effects, have severed property prices from the underlying economic productivity of communities. For most residential and commercial real estate (excluding high-quality assets operating in separate economic systems), “affordability” has become a falsehood. Young people whose wages never keep pace with rising prices will not buy at current levels. For the fortunate, many properties will eventually pass naturally to their children; if no heirs exist, they will be sold into a shrinking market of homebuyers and families. Once again, the math is brutal and unavoidable: a significant deflation in real estate is not a possibility but a certainty.

To accelerate this liquidity event, the shift of real estate from investment to consumption, combined with rising property taxes, will create a vicious cycle — pushing prices increasingly in line with government spending inflation, including public schools, social services, municipal infrastructure, and the overall cost of services, which are generally higher than goods. Fiscal pressures will force markets into unsustainable sell-offs. New York City Mayor Mamdani’s push to raise property taxes is not an isolated case but a harbinger of the “inertia capital asset tax” era — especially in cities where wealth inequality has become so entrenched that the current political system is unsustainable. This leads to my second certain truth.

Truth Two: Wealth inequality will reach a tipping point, and a wealth tax will become an unexpected solution

The demographic challenge is essentially a vertical collapse: the population pyramid is slowly reversing, with the base shrinking and the burden of supporting the elderly becoming unsustainable. Beyond this vertical demographic collapse, there is a more troubling horizontal fissure — income inequality.

When headlines proclaim “the top 10% of the global population owns 76% of global wealth” (UN 2022 World Inequality Report), it’s crucial to understand a key distinction: this isn’t about some countries getting rich first while others lag behind. It’s about a global phenomenon happening within every country: wealth gaps are widening everywhere, accelerating across all measurable timeframes.

More precisely, the issue isn’t just income inequality but wealth concentration. In human history, never has such a high proportion of wealth been held by the top 1%. In the U.S., the top 1%’s net worth share has continued to rise, now approaching one-third of the total national wealth.

The difference between income and wealth is vital. Income is a transactional concept — “flowing money,” a market valuation of productivity; wealth, on the other hand, is “static money”: it lacks intrinsic productivity. In a credit-driven zero-sum game, concentrated wealth drags down the velocity of money needed for broad economic activity. When wealth is highly concentrated, it ceases to circulate, causing a silent slowdown in consumption and economic vitality.

In this context, without significant productivity growth to generate new resources, wealth taxes — despite ongoing controversy — will inevitably become the outcome of fiscal nihilism. The only viable way to rebalance this system is to tax wealth itself — regardless of how crude or illogical the design. Wealth taxes can be viewed as a mirror to social security: the former extracts funds from the bottom to support survival, the latter from the top to sustain it. Both are levies on unrealized value, differing only in direction: vertical (from the young) versus horizontal (from the rich).

The process of implementing wealth taxes has already begun. On February 12, 2026, the Dutch House of Representatives passed a landmark bill imposing a 36% annual tax on unrealized gains in stocks, bonds, and cryptocurrencies, regardless of whether these assets have been sold. The bill awaits Senate approval, with a majority of supporting parties — approval is almost certain. Whether this policy is morally justified, mathematically rigorous, or legally enforceable is less relevant — those obsessing over these questions overlook the bigger core issue: what happens when other countries follow suit?

Look at the birthplace and last bastion of capitalism — the United States. A poll by The New York Times shows that support for wealth taxes is nearly universal across all demographic groups, except among college-educated men (a rapidly shrinking demographic).

This is the core of understanding “citizenship” in capitalism. Many believe that capital account liberalization is an inherent feature of the modern world, but the vulnerable know that when a country chooses, capital can be restricted — as China, Russia, and others have demonstrated. The historical problem is “betrayal”: a single country’s wealth tax can simply push capital into other jurisdictions. But as global fiscal nihilism intensifies, national political will is aligning toward a single outcome: collective coordination. The long-standing safe havens that profited from the prisoner’s dilemma will no longer be tolerated.

After the Netherlands’ decision, the EU is actively coordinating a tax framework to prevent capital flight among member states. By mid-century, the global “passport” for capital will be revoked, replaced by a “Schrödinger visa” — simultaneously valid and invalid in different regulatory regimes. Local restrictions on capital will only increase demand for “external funds” that can bypass compliance layers. Welcome to the era of hard currency-backed prices — the revival of a species economy.

Based on David Hume’s 1752 treatise “Of the Balance of Trade,” modern investors have long regarded “external funds” as assets like gold or Bitcoin — borderless, jurisdictionless, sovereign-free. But four centuries later, a new form of “external fund” is emerging, fundamentally redefining comparative advantage. It’s time to write a new paper on international relations: “On Intelligent Balance.”

As Hume noted, trade surpluses and gold flows determine a nation’s relative strength; today, the new determinant of comparative advantage will be the concentration of productive artificial intelligence infrastructure — who controls computing power, data, and the models that govern all other systems. Capital will flow, as it once did toward manufacturing hegemony, toward AI dominance. The earliest adopters — countries, institutions, individuals — will define new wealth hierarchies. This leads to my third certain truth.

Truth Three: Artificial intelligence will destroy the relative value of labor and redefine capital in a purpose-driven economy

Karl Marx described capital as “dead labor, like a vampire, which can only survive by sucking the living labor.” This famous quote highlights a socialist view: capital, as accumulated labor, continually gains value by consuming workers’ living labor.

But Marx’s analysis contains a critical flaw: he believed capital was inherently inert, needing to continually consume human labor to profit. Now, with the rise of credit and the explosion of AI, we are entering a new paradigm — the “vampire” is not only active but can bypass human labor altogether, profiting solely from energy consumption. As shown in the chart below, the trend of increasing capital income share and decreasing labor income share over the past decade has been brewing, and AI will push this beyond an irreversible inflection point.

Since 1980, the share of labor income in U.S. GDP has fallen from about 65% to below 55%, even before the widespread adoption of large language models (LLMs). Goldman Sachs estimates that generative AI could threaten the automation of 300 million full-time jobs by 2023.

In other words, AI is not just a capital-intensive technology; it is a labor-disrupting technology. The rise of AI will permanently alter the fundamental economic principles underpinning society, reshaping the relationship between capital and labor in an irreversible way. More specifically, as labor costs and computing costs converge, a new “capital war” will erupt globally, requiring unprecedented government subsidies, aggressive industrial policies, and fiscal measures. In this world, capital will reign supreme: asset ownership will become the sole barrier between dignity and the permanent underclass. This is precisely what the IMF predicts: in an AI-dominated economy, the tax base will shift from labor income to corporate profits and capital gains.

However, the very definition of capital will be reconfigured — because asset ownership will no longer be limited to financial assets. The vast AI industry also depends on another factor, even more precious and irreplaceable than energy: data. Specifically, the footprints you leave daily provide the context for models’ reasoning and learning. Humanity is moving toward a new paradigm: thoughts, behaviors, commands, preferences, especially intentions, will become highly valuable. When intention itself becomes capital, a fundamentally different economic order will emerge — asset ownership will take on a “non-custodial” form, detached from the familiar KYC/AML frameworks of traditional finance. Autonomous agent systems are already equipped with crypto wallets, autonomously paying for compute power, APIs, and data. In a world where value must seamlessly flow between intelligent agents and preferences are explicitly traded, this is an inevitable reality — labor and capital will exist in a superimposed “Schrödinger state.”

Historically, financial assets have been clearly within the regulatory boundaries of agencies like the SEC, CFTC, FINRA, and FASB. But as assets evolve into “active” forms — where your data footprints become collateral, and intentions become monetizable outputs (via open, API-based, context-embedded products) — AI systems will blur these boundaries from multiple directions. The FCC has jurisdiction because cognitive information is transmitted via spectrum; the FTC because intentions fall under consumer protection; the DoD because data sovereignty is a national security issue.

In other words, this overlay effect will extend beyond assets to the entire regulatory system. When no single agency can define clear boundaries for “financial assets,” the question of “who issues, protects, and confiscates money” will become the most contentious geopolitical issue of this century.

Welcome to the era of intelligent currency.

Three certainties, two convergences, one conclusion

If you’ve read this far, you might feel uneasy — perhaps caught in a web of uncertainty again. But remember: the entire purpose of this article is to find clear answers. Let’s reaffirm the most core conclusion: Population collapse, wealth inequality, and AI-driven labor displacement are inevitable. They are not separate risks to be weighed or hedged but are converging logically. The demographic pyramid is collapsing vertically, wealth levels at the bottom are tearing apart, and all of this is amplified by a technology revolution that favors capital.

Many investors attempt to cope with this uncertainty through localized solutions: rotating assets here, hedging there, betting on AI infrastructure themes, or blindly hoping for crypto. The most tempting and seemingly “safe” counterargument for traditional investors is technological optimism — that AI-driven productivity growth will rapidly expand the wealth pie enough to offset the demographic collapse. It sounds convincing, but it’s a superficially complex yet fundamentally off-center logic.

Throughout human history, productivity gains have never been fast or fair enough to prevent political and social fractures caused by inequality. The Industrial Revolution did not stop worker uprisings; it fueled them — despite creating unprecedented total wealth. The key is that AI is not a neutral productivity multiplier: by design, it is a concentration of capital. Every bit of productivity it creates will first and most durably accrue to those who control compute, data, and models. Optimists are not wrong in believing the wealth pie will grow; they are wrong in assuming everyone will share equally in the slice. That is the core of the entire debate.

When you take a sufficiently macro view of these truly irreversible global phenomena, the direction becomes surprisingly clear:

• Global aging and population decline are 100% certain;
• Wealth inequality will widen to trigger global capital restrictions — also 100% certain;
• AI will structurally favor capital, driving a new form of “transition capital” unseen in history — again, 100% certain.

Most critically, these three points share a common core: they are all fundamentally “global.” Intergenerational demographic shifts, asset allocations, and capital costs are more interconnected now than ever before, and this interconnectedness is strengthening. Moreover, this correlation is not only spatial but also temporal — the evolution of wealth and population structures is unidirectional and irreversible. This means the convergence is both global and synchronous.

In sum, this forms what I see as the most critical collective negotiation problem of the modern era: the intergenerational exit from the liquidity prisoner’s dilemma. It raises the question:

• When the younger generation perceives government directives as “picking up the slack for their elders,” will they still voluntarily participate in “ownership of American capitalism”?
• When the wealthy friends shift toward “tax-efficient” planning, will top-tier billionaires still willingly bear heavy taxes?
• When profit-driven competitors ignore capital costs and continue expanding, will AI companies slow their growth voluntarily?

A Nash equilibrium will emerge: all participants will rationally choose to betray this dominant strategy — regardless of others’ actions — because the cost of inaction is too high. When critical points arrive, everyone will rationally seek to exit liquidity simultaneously.

This Faustian transaction of liquidity should not be viewed as a potential risk or tail hedge but as the most predictable large-scale coordination event in human capital markets history. Some might say, in a deflationary environment, hold bonds or ride AI stocks. Perhaps. But my core principle is simpler and more structural: hold assets that won’t turn you into someone else’s exit liquidity taker. Under this framework, the assets you should avoid most are: real estate, bonds, and U.S. equities — all tools of duration manipulation, whether intentionally designed or not, representing the greatest intergenerational wealth transfer in history.

Conversely, your ideal assets should meet three inverse conditions:

• Currently held at the lowest demographic share but poised to become the highest in the future;
• Most likely to serve as safe havens outside jurisdiction when capital mobility is heavily taxed, restricted, or confiscated;
• Closest to the form of capital that will seamlessly operate in an autonomous, intelligent world, replacing human labor without intermediaries.

In 1453, when the Ottoman Empire breached the walls of Constantinople, the Byzantine merchant class lost all assets valued in imperial credit: land, titles, government bonds. None escaped unscathed. But young, ambitious scholars and merchants moved their wealth — manuscripts, gold, knowledge — westward to Florence, igniting what would become the Renaissance.

Among them was a young Byzantine scholar named Johannes Bessarion. Born in 1403 in Trebizond on the Black Sea, he carried several chests of irreplaceable Greek manuscripts fleeing Constantinople — containing nearly all the intellectual heritage of the ancient world. He became the most prolific provider of books and manuscripts to the West in the 15th century, creating one of the earliest “information technologies”: the Marcian Library — Europe’s first open-source knowledge repository (public library). These holdings in Venice became the direct material for Aldus Manutius, who printed Aristotle’s complete works and dozens of Greek classics, sparking the printing revolution that led to the Reformation, Scientific Revolution, and Enlightenment. Bessarion’s portable, autonomous, jurisdiction-free capital, surviving five centuries, ultimately nurtured Western civilization.

Assets capable of crossing time and space endure; those that cannot fade away.

This leads to our final, radical conclusion — the only bold decision worth considering when facing many traditional traps:

You truly need to hold nomadic capital. This is capital that can freely migrate across demographic, political, and AI-native ecosystems; bypassing the “Straits of Hormuz” of currency. In the 21st century, “nomadic” equals “digital.” Specific investment tools vary, but a radical investment framework suggests allocating 60% to compliant assets and 40% to risk-averse assets. But if you carefully follow the three conditions above — holding assets young people will ultimately need, assets difficult for governments to seize, and assets in autonomous economic systems that can be traded seamlessly — the outcome ceases to be a prediction and becomes an inevitability. Uncertainty will ultimately turn into certainty.

After all, only one disruptive asset has ever met all three conditions from its inception: code. For highly proactive individuals, this step is already straightforward.

The rest is just a matter of timing.