Austrian hard money theory is the monetary doctrine, rooted in the Austrian School of economics, holding that sound money must have a credibly fixed or hard-to-inflate supply so it can reliably preserve purchasing power over time. It favours commodity-like monies (historically gold, latterly Bitcoin) over fiat currencies whose supply central banks can expand at will, arguing that inflation distorts price signals and the capital structure. The theory underpins Bitcoin’s framing as a deflationary store of value with an absolutely scarce, algorithmically capped issuance.
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- Drawing on Mises and Hayek, the theory treats monetary expansion as the root of business cycles and capital misallocation. Proponents view Bitcoin’s fixed 21-million-coin cap and predictable issuance as a digital implementation of hard money principles, contrasting it with discretionary fiat regimes.