Debasement Strategy: Bitcoin, Gold, And Energy Dissipation Risk Premia

Debasement Strategy: the maximum energy dissipation risk premia hypothesis presents a thermodynamic lens on markets, framing economies as systems driven by energy flows, with money acting as a catalyst that transfers “energetic debt” across space and time. Within this framework, the paper argues that Bitcoin, designed as Proof of Work “hard money backed by energy,” and gold can serve as core building blocks in a debasement allocation as fiat purchasing power structurally declines.

Authored by Sebastien Guglietta, Head of Asset Management, the document connects portfolio theory with information theory to propose a “mean entropy” interpretation of risk premia. Its central hypothesis is that assets with higher rates of energy dissipation should, over time, command higher expected returns, and it includes a long only simulation combining Bitcoin, gold, and equities from November 2018 to December 2025 to illustrate how the framework could be applied in portfolio construction.

Read the Full Research: here