Debasement Trade Splits as Gold and Bitcoin Options Markets Diverge
The great debasement trade is splitting in two as Treasuries sink and the dollar falls this year. Bitcoin and gold are being touted as hedges against currency debasement, yet their options markets are telling a different story.
Gold traders are pushing their targets higher with little protection against a reversal, while Bitcoin traders are pushing higher too but hedging against a fall. This divergence in the options market is unusual and suggests that investors may be taking on more risk than they realize.
The dollar has been falling this year, which has led to increased interest in gold and Bitcoin as safe-haven assets. However, the options market is indicating that traders are not necessarily hedging against a fall in these assets, but rather betting on their continued rise.