Bitcoin Correlation with Gold Hits Second-Highest Level on Record
The correlation between Bitcoin and gold has reached its second-highest level on record, while the link between Bitcoin and the Nasdaq 100 has dropped to a two-year low. This shift is being driven by the rising US federal debt, which recently crossed $40 trillion, and increasing long-term Treasury yields.
Bitcoin's scarcity, monetary independence, and store-of-value function are becoming increasingly attractive in an environment where fiat currencies are losing purchasing power. Its design allows for transparent issuance and a capped supply of 21 million, making it a scarce digital alternative to gold.
The debasement trade is returning as investors seek assets that hedge against deteriorating fiscal and monetary fundamentals. This trend has been accompanied by significant inflows into Bitcoin ETFs, with net assets crossing $100 billion, and spot strength in the cryptocurrency market.