What people are really asking

Reported inflation has cooled in many economies, and central banks say it is under control. So leaders ask a reasonable question: why change how we hold our cash?

What is true in the myth

Inflation in some years is modest, and cash gives you something nothing else does: you can pay people tomorrow, with no price risk. A treasury needs a core of cash and a plan for liquidity. Nothing in this article argues against that.

Where the myth breaks down

“Under control” describes the rate of change, not the damage already done. Prices do not go back. They keep rising from a higher level, and the effect compounds. Take a simple example. At 5% annual inflation, 100 units of purchasing power today buys what about 78 units buys after five years. At 3%, it is about 86. The cash balance on your statement looks the same. What it buys does not.

Now think about where that erosion lands in a company. It is not on a line in your accounts. It shows up later as supplier prices you cannot fully pass on, wages you must raise to keep your people, and a reserve that covers fewer months than it used to.

There is also the supply side. Government money supply has expanded for decades and tends to expand faster in a crisis. The value of a currency is tied to how much of it exists. An asset with a fixed supply sits at the opposite end of that spectrum.

A better question

Ask your finance team: how many months of payroll does our reserve cover today, compared with five years ago, once prices are adjusted? If the honest answer is “fewer”, the question is no longer whether inflation matters. It is how much of the reserve should be exposed to it.

What we do with your team

We run this exercise with your own numbers. It takes an hour, and it usually decides whether a Bitcoin treasury is a conversation worth continuing. If it is, the next step is a written policy that limits the amount and the risk.