Gold and Bitcoin Traders Diverge in Debasement Bets
Investors who believe in the debasement idea are taking two different approaches to gold and Bitcoin. In both cases, they're leaning bullish, but their positioning differs.
In gold, options flows favor higher prices with little downside protection. For example, SPDR Gold Shares has open interest skewed towards calls over puts, with a ratio of more than five calls per single put near the September 18 expiry date. This date is significant because it follows the Federal Reserve's next rate decision.
Gold's call bias extends beyond the Fed meeting into October and next year, partly due to central bank demand that supports bullion. However, this demand isn't reflected in options data for GLD.
In contrast, Bitcoin traders are also leaning bullish but many are pairing those bets with puts near current levels. This is evident in BlackRock's iShares Bitcoin Trust, where the call-to-put balance sits at roughly four calls to every three puts.
Griffin Ardern, co-founder and options portfolio manager of Primal Fund, noted that official-sector buying gives gold an underlying bid. He also stated that 'gold wins in every branch of the fiscal-dominance scenario.'