Bitcoin's Digital Gold Rush
The recent rally in Bitcoin has some investors reevaluating its role as a digital gold store. The cryptocurrency jumped roughly 23% in the week ended Aug 21, while gold gained about 5%, the dollar weakened 0.8%, and the S&P 500 fell 1.4%. This unusual combination came after Treasury Secretary Scott Bessent announced plans to double the size of Treasury buybacks for longer-dated bonds.
The bond market later reversed most of that move, but Bitcoin and gold did not follow suit. Historically, when Bitcoin gains more than 15% while stocks fall, gold rises and the dollar weakens. This time, the 30-year yield actually rose 1 basis point.
The move is already showing up in the U.S. spot Bitcoin ETF market. The 12 U.S. spot Bitcoin ETFs recorded a combined $1.92 billion in net inflows last week, with BlackRock's iShares Bitcoin Trust accounting for nearly 70% of that total.