Bitcoin (BTC) analyst Willy Woo has offered an answer to a challenge that economist Saifedean Ammous first posed in 2019. Woo argues that Bitcoin’s fixed supply makes borrowing riskier, which could slow economic growth.
Ammous, author of the book The Bitcoin Standard, reposted his original call on X. He says he is still waiting for an economist to explain clearly why a hard-capped money would fail. His 2019 post asked for an argument beyond “snarky eyerolls.” However, the most detailed reply so far came from a crypto analyst, not an academic.
Why Would Bitcoin’s Fixed Supply Hold Back Lending?
Woo ties the problem with Bitcoin’s fixed supply directly to debt. When a currency keeps rising in value, borrowers must repay loans in money that grows more expensive. As a result, the risk of default climbs, and lenders pull back.
He points to the current wave of global borrowing for AI infrastructure as an example of debt-fueled growth. Some investors already warn that the AI data center boom could end in a crash.
History offers a parallel. Under the gold standard, he notes, the ratio of paper money to gold backing rose to ease lending risk. That shift kept credit flowing on top of a scarce reserve asset.
Slower Growth or Fewer Bubbles?
Woo does not frame the cost of Bitcoin’s fixed supply as purely negative. A Bitcoin standard that uses satoshis, the smallest BTC unit, would likely deliver much slower growth. Yet it would also produce far fewer bubbles, he says.
One user countered that savings build capital from the bottom up. Woo disagreed, saying growth relies on tech, energy, and raw materials. Those need mega-scale infrastructure and large pools of capital.
Woo has previously argued that Bitcoin may follow a 6-8 year debt cycle.
The exchange revives an old divide. Bitcoin advocates often cite the dollar’s lost purchasing power as the case for hard money. Critics, in contrast, see Bitcoin’s fixed supply as a brake on credit.
Woo’s answer suggests both camps describe the same mechanism from opposite ends. The real question is whether a sats-based economy would trade faster growth for fewer bubbles.
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