TASTE IS THE ULTIMATE ASSET CLASS

1. The Scarcest Of All Assets

In an age of information saturation, excessive optionality and accelerating monetary expansion, the rarest intangible capital and most enduring source of out-performance is… “TASTE”.

Taste is the ability to discern what resonates, what’s relevant, what holds value. It’s shaped by experience, culture, and social context. Taste represents more than preference. It's a refined filter for navigating endless choices and signalling identity through scarcity.

This scarcity creates economic value. In post-material societies, consumption habits define social stratification, and those who can identify and invest in culturally resonant assets before they achieve mainstream recognition capture massive asymmetric returns.

In a world of abundance and AI proliferation where anyone can create anything, taste becomes the ultimate differentiator, elevating those who master it. The challenge lies in distinguishing refined taste from popular preference. But not all taste is valid as not all desire is sacred, consumption is not neutral, while modern egalitarianism seeks to “democratize” everything and validate all tastes equally, markets reward discernment that identifies enduring cultural value over fleeting trends.

A taste economy is on the rise as the defining force of value creation, where taste—once considered unmonetizable, emerges as a scarce and potent currency  in a world saturated with scalable tech. Tech spreads information like wildfire making information and optionality ubiquitous, success now demands the fusion of beautiful form with function, where technology meets artistry to shape cultural currents that pure utility cannot reach.

This shift elevates taste as the ultimate human edge that AI cannot replicate, rooted in the deeply personal and ineffable nature of human experience, while AI excels at analyzing trends or replicating forms, it remains taste-blind, unable to grasp why a flawed, hand-painted vase might outshine a perfect replica. 

Combining AI with human taste—curated through lived experience and discernment—creates a game-changing edge, where humans thrive by curating or crafting products that resonate like magic, not just mimic trends, as such, A.I. must become a tool for amplifying our vision rather than defining it. 

As AI becomes ubiquitous, sparking a backlash against its homogeneity, capital allocation rooted in taste will endure, mediocre taste will fade into invisibility, good taste becomes unforgettable remaining humanity’s inimitable strength, making it the only moat AI can’t cross.

Nobody owns "taste," but many will try.

Many will claim the title of tastemaker and aim to be the gatekeeper: Collectors, curators, founders, capital allocators, etc.. A timeless tension that has and will continue to exist as a status game fuelled by social and economic stakes, where the cycle of influence and reaction perpetually reshapes who gets to define taste. 

2. The Six Forces of Taste-Based Value Creation

Assets whose value is anchored in taste compound wealth through six reinforcing forces:

3. Market Landscape and Performance

The taste economy encompasses multiple asset classes demonstrating resilience:

• Art & Collectibles —  Blue-chip auction turnover still posted +11 % in 2023 despite risk-asset volatility, led by works with established cultural narratives.Despite a cyclical pull-back (Artprice100 −8.3 % in 2024), blue-chip works still led Knight Frank’s Luxury Investment Index with +11 % in 2023, proving their rôle as long-cycle stores of value.
  

• Collectible Automobiles — The Hagerty Blue-Chip Index remains flat YTD 2025 and +6 % since pre-COVID 2019, demonstrating price stickiness even while broader risk assets corrected–as Gen-Z entrants imitate boomer icons.
  

• Trophy Real Estate — Prime global property prices rose 3.1 % in 2023 and display lower volatility than equities; tightening supply in “world-city” neighbourhoods reinforces scarcity.
  

• Digital Assets — Total crypto-asset capitalisation is a ,≈ $2 trillion market today. Bitcoin alone is now the world’s 5th-largest asset at $2.16 trillion. The thesis projects expansion to $100 trillion by 2035, driven by monetary expansion, asset tokenization, and regulatory normalization.
  

4. Why “Taste” Outperforms

Taste-based assets exhibit unique properties:

Supply Inelasticity: Unlike fiat money or equity buybacks, authenticity-verified cultural goods cannot be diluted.

Dual Utility: These assets provide both financial returns and consumption value through status, aesthetic pleasure, and narrative meaning.

Lindy Advantage – A 500-year-old Leonardo, a century-old Patek Philippe, or a protocol that has survived three halvings share the same Lindy “half-life” logic: Survival begets confidence, which begets capital.

Tokenization Optionality: Blockchain technology enables fractional ownership, DeFi collateralization, and perpetual royalties to creators/IP holders., expanding investment accessibility.

Cross-Cycle Resilience: Historical data shows taste assets experience shallower drawdowns than traditional risk assets. The 2020-22 art market correction reached only -10% peak-to-trough versus -34% for global equities.

5. Correlation to Money Supply & Business Cycles

Historical analysis reveals taste assets follow predictable liquidity cycles. Bitcoin bull phases lag expansions in global M2 by 12-18 months; the same liquidity waves elevate cultural asset indices. As the marginal unit of new money seeks scarce stores of value, “taste” assets and crypto converge into a single, mutually reinforcing asset class. -Because the supply of cultural assets and cryptographically capped tokens is inelastic, their prices tend to absorb the marginal unit of excess currency.

Current financial conditions indicate optimal environments for taste-based investments. The GMI Financial Conditions Index suggests returning optimism and capital availability—perfect conditions for assets thriving on perception, scarcity, and cultural positioning.

6. Risk Framework

• Liquidity Shocks – Forced sales in illiquid sub-markets can create transient 30-50 % price gaps; maintain cash buffers. - Small, illiquid niches can gap 30–50 % if a prestige narrative breaks.

• Regulatory Overhang: Intellectual property law changes or adverse crypto regulations could impair cross-border transferability and ownership rights.

• Cultural Drift: Taste evolves unpredictably. Continuous curation and portfolio pruning remain essential to maintain cultural relevance.

• Mimetic Volatility: Preference shifts can trigger sharp reversals when cultural narratives break or new taste arbiters emerge.

7. Investment Implications

As fiat supply balloons and median asset correlations drift toward one, the scarcity of culturally resonant, mimetic assets become the ultimate store of value.

Investors who curate a portfolio at the intersection of culture and cryptography gain asymmetric exposure to both the greatest wealth-creation engine of our era and the deepest human desire for meaning, beauty and status. 

Success requires active curation rather than passive allocation. Investors must develop their own taste while remaining sensitive to broader cultural currents. The goal is not to predict taste but to identify it early and benefit from its inevitable diffusion through society.

In a world where money can be printed but taste must be earned, owning taste means owning tomorrow's most reflexive and resilient form of capital. The scarcest resource in an abundant world is the discernment to separate signal from noise—and the conviction to act on that discernment.

8. Legendary Alternative Investments that have outperformed the S&P 500 by extraordinary margins

Six extraordinary examples of cultural relevant assets that have achieved legendary status by delivering returns that dwarf traditional market performance. From Paul Newman's personal Rolex Daytona that transformed a $1,000 purchase into $17.8 million over 35 years (a staggering 1,779,900% return), to a digital CryptoPunk that skyrocketed from $1,646 to $11.7 million in just four years (711,000% return), these assets represent the pinnacle of alternative investment success stories, but notice something else?

Exceptional Returns:

• Fine Watches (Rolex Daytona): The Paul Newman Daytona’s 1,779,900% return ($1,000 to $17.8M) over ~35 years is the highest, driven by its celebrity provenance and rarity. This dwarfs the S&P 500’s ~2,000% return, with an overperformance of +1,777,900%.

• NFT Blue-Chip Artworks (CryptoPunk #7523): The 711,000% return ($1,646 to $11.7M) over just 4 years reflects the NFT market’s explosive growth in 2021, outperforming the S&P 500’s ~80% by +710,920%. This highlights NFTs’ potential for rapid, high-magnitude gains.

• Rare Whiskey (Macallan 1926): A 9,400% return ($20,000 to $1.9M) over ~25 years significantly outpaces the S&P 500’s ~800%, with +8,600% overperformance, driven by scarcity and global demand.

• Premium Wines (DRC 1990): A 2,400% return ($1,000 to $25,000 per bottle) over ~30 years outperforms the S&P 500’s ~1,200% by +1,200%, reflecting wine’s stability and cultural prestige.

• Collectible Automobiles (Mercedes SLR): A 1,320% return ($10M to $142M) over ~25 years outperforms the S&P 500’s ~800% by +520%, cementing ultra-rare cars as top performers.

• Hermès Birkin Bags (Himalayan): A 525% return ($80,000 to $500,000) over ~19 years outperforms the S&P 500’s ~400% by +125%, with steady appreciation driven by exclusivity.

Key Insights

Exceptional Performers:

• Paul Newman's Rolex: 1.78M% return over 35 years

• CryptoPunk #7523: 711K% return in just 4 years

• Macallan 1926: 9.4K% return showcasing whiskey's potential

Market Dynamics:

• All assets significantly outperformed the S&P 500

• Shorter holding periods showed higher annualized returns

• Scarcity and cultural significance drive extreme valuations

These legendary investments demonstrate that exceptional returns are possible when rarity, cultural significance, and conviction align perfectly. While they represent outliers in alternative asset performance—investments that became cultural phenomena and redefined their respective markets—they illustrate how understanding scarcity, authenticity, and cultural relevance produce returns that make traditional market performance look pedestrian.

Investment Implications: Positioning for the Taste Economy

• Taste-driven physical assets: Real estate, IP, art, collectibles, luxury goods with strong cultural narratives

• Digital taste platforms: Tools that help people discover, express, and monetize their aesthetic preferences

• Cultural tokenization: Blockchain projects that capture and tradeable cultural value

• Taste-forward founders: Entrepreneurs who demonstrate exceptional cultural insight

• Community-driven protocols: Blockchain and social platforms with strong taste-based network effects

• AI-human collaboration tools: Technologies that amplify rather than replace human aesthetic judgment

9. Outro

As artificial intelligence automates traditional economic functions, digital assets enable frictionless global transactions, and the attention economy rewards cultural relevance above all else, taste-based investments are transitioning from luxury curiosities to fundamental economic drivers. Many companies and assets exemplify this shift:

Tether's $3 billion annual profits from a 25-person team, Hyperliquid's billion-dollar valuation built by anonymous developers, OnlyFans' creator economy generating $6 billion annually, CryptoPunks generating resells in the billions, RWA tokenization, tokenized fractional ownership of blue-chip art, rare wines, classic cars, and premium real estate—represent a new category of lean, hyper-profitable enterprises that monetize taste, attention, and cultural cachet rather than physical production or traditional services..

The future belongs to those who can identify, acquire, and monetize taste at scale. The infrastructure is now in place. The business models are proven. The acceleration is underway.

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Disclaimer: This content is for information and education purposes only and it is not intended to serve as investment, financial, tax or legal advice. Coolture might hold in its portfolio any or all of the assets here mentioned. Do your own research before investing.