Bitcoin, Gold Surge as US Debt Hits Record $40 Trillion
The US government's massive debt has reached a new milestone, exceeding $40 trillion in August 2026. In response to this development, the Treasury Department announced long-term debt buybacks.
As expected, the move triggered a market reaction, with Treasuries plummeting and the dollar declining in value. Investors are now turning to alternative assets as hedges against currency debasement, with Bitcoin and gold experiencing significant gains.
Bitcoin surged 23% in late August 2026, pushing its price above $77,000, while gold prices rose in tandem as the dollar weakened. The correlation between Bitcoin and gold has hit multi-year highs, reaching over 0.5 in early September.
The divergence in options positioning suggests that investors view Bitcoin and gold differently. Gold is seeing overwhelmingly bullish bets, with a more than 5:1 ratio of calls to puts on SPDR Gold Shares. In contrast, Bitcoin ETF options show a balanced distribution of bullish and bearish bets.