Hard Money

Hard money is a term used to describe forms of currency that hold their value and aren't easily inflated by increasing the supply. Usually, hard money has a fixed or very limited supply, making it scarce compared to currencies that can be produced at will.

Historically, examples of hard money include assets like gold and silver—both valued for their rarity and resistance to inflation. In the digital era, Bitcoin is often classified as hard money because it is capped at 21 million coins, meaning no more can ever be created. This scarcity is a key reason hard money often retains purchasing power over the long run, while fiat currencies, like dollars or euros, can lose value if governments print more of them.

Hard money is frequently contrasted with fiat money, which governments can create without physical limits, sometimes leading to economic instability. Additionally, while hard money focuses on how difficult it is to create new currency, the related term “sound money” refers more broadly to how well a currency preserves its value.