In the grand scheme of wealth creation, society reserves its greatest rewards for the builders—visionaries who bring something entirely new into existence. These individuals embark on the most challenging journey imaginable: transforming an abstract idea into tangible reality. This process, often referred to as “zero-to-one,” is the pinnacle of human ingenuity and creativity. The likes of Henry Ford, who envisioned the Model T, Steve Jobs, who imagined the iPhone, and Elon Musk, who dreams of colonizing Mars, exemplify this extraordinary category of builders.
Why Builders Earn the Most
Builders who achieve the improbable, creating products or services previously unimaginable, receive the highest compensation. Their success not only shapes industries but also fulfills latent needs or desires in society. They risk everything—time, resources, and reputation—on the belief that their creation will someday be in demand.
Yet, not all builders work in the physical realm. There are those who construct organizations or ecosystems capable of generating enormous societal value. In the realm of finance, some individuals establish investment empires from their inception. These builders of investment firms, such as Ken Griffin (Citadel), Stephen Schwarzman (Blackstone), Ray Dalio (Bridgewater Associates), and Warren Buffett (Berkshire Hathaway), have earned massive fortunes by creating platforms that generate sustained wealth.
Investors: Builders in a Different Arena
Investors, while essential to economic progress, are often rewarded less than builders. This discrepancy stems from the relative simplicity of investing compared to the challenges of creation. Investors allocate capital to existing opportunities rather than conjuring them from scratch. However, there is nuance here—some investors act as visionary builders themselves by backing projects or firms that others cannot yet imagine as valuable.
Buffett’s extraordinary wealth, for instance, is a testament to his decades-long journey of compounding returns at Berkshire Hathaway, an achievement unparalleled in modern investment history. Other investment titans have succeeded by predicting demand for previously undervalued assets, thus bridging the gap between builders and traditional investors.
The Geopolitical Shift: $300 Billion and the Rise of Alternatives
The financial landscape witnessed a seismic shift in February 2022 when Western nations froze $300 billion of Russian assets in response to the Ukraine invasion. This action caused a significant impact on the global financial system. Sovereign nations storing their reserves in Western-controlled assets began exploring alternatives to ensure their wealth remained accessible. Precious metals, particularly gold, became a natural choice.
Initially, gold’s performance faltered under the weight of the Federal Reserve’s historic rate hike cycle beginning in March 2022. Prices dropped by 20%, underscoring the challenges of investing even in times of apparent clarity. However, as buyers returned, gold eventually surged, climbing 25% above its pre-invasion levels.
Crypto’s Parallel Evolution
In parallel, Bitcoin and other cryptocurrencies emerged as alternative stores of value. Bitcoin, for instance, plummeted from $40,000 to $16,000 during the FTX collapse but has since surged past $100,000. This remarkable rebound reflects growing recognition of Bitcoin as a digital equivalent to gold and a secure store of value in a rapidly digitizing world.
Ethereum, meanwhile, has undergone transformative growth. Its network has become faster, cheaper, more secure, and increasingly versatile. Despite extreme market volatility and skepticism, the relentless innovation by crypto builders during bear markets has laid a strong foundation for future growth.
Post-Election Pivot: A New Crypto Era
The recent U.S. election marked a pivotal shift in government policy toward the cryptocurrency industry. The easing of regulatory hostility has catalyzed a wave of optimism among investors and institutions. Markets have repriced crypto assets in anticipation of widespread adoption, and momentum is building for blockchain technologies to achieve scalability on a global scale.
This shift is more than a momentary reprieve—it represents the beginning of a profound transformation. As financial markets integrate these technologies, the growth curve is expected to steepen significantly.
The Blockchain Revolution in Finance
Looking ahead, the implications for the global financial system are staggering. Blockchain technology has the potential to overhaul trading, settlement, custody, and risk infrastructure. Every major bank, broker, custodian, exchange, asset manager, and payments provider will be compelled to adapt or face obsolescence. Institutions must either build their own blockchain-based systems, partner with infrastructure providers, or risk losing to more agile competitors.
Demand for crypto builders and infrastructure providers will likely reach unprecedented levels. These innovators will create the foundations of a new financial order—one that promises greater efficiency, transparency, and security.
Builders of the New Era
The coming decade will be defined by the builders who reimagine the financial system on blockchain rails. Investors, too, will play a crucial role by recognizing and funding this shift. Together, they will shape a world where decentralized, secure, and efficient systems form the backbone of commerce and finance.
The rise of crypto assets and blockchain technology is not merely a technological evolution but a societal revolution. Those who can imagine and act upon the unimaginable will define this era.
By Eric Peters, CIO of One River Asset Management https://bit.ly/4feQRNE
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