Bitcoin has matured. BlackRock's iShares Bitcoin Trust has accumulated over $62 billion in inflows. The US established a Strategic Bitcoin Reserve. Volatility has compressed to levels comparable with megacap tech stocks. These are facts, not opinions.

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But institutional adoption doesn't resolve Bitcoin's fundamental challenge: it produces nothing. No earnings, no dividends, no rental income. Benjamin Graham distinguished between the "voting machine" (short-term sentiment) and the "weighing machine" (long-term cash flows). Bitcoin exists only in the first world—its price determined entirely by what the next buyer will pay.

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The "digital gold" thesis has repeatedly failed empirical tests. During the 2022 bear market, gold declined 7% while Bitcoin cratered 58%. During the April 2025 tariff crisis, gold rose 2% while Bitcoin fell 20%. When investors needed protection, Bitcoin tracked equities rather than hedging them.

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For clients who understand these dynamics and still want exposure—typically those with long time horizons, high risk tolerance, and genuinely discretionary capital—a small allocation of 1-3% is defensible. The asymmetry limits downside while preserving upside if institutional adoption continues.

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But Bitcoin doesn't clear the bar for a core portfolio holding. Fiduciaries managing capital for retirement, education, and healthcare need more than "it might work." We need identifiable cash flows and reasonable discount rates. Bitcoin offers neither.

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Scarcity is a feature. Valuation is the question.