Dollar Weakness Drives BTC and Gold Prices Higher in August

The price of Bitcoin and gold rose in August as the US dollar weakened, making alternatives to fiat currency more attractive. However, their relationship remained uneven due to differences in supply, liquidity, and volatility.

BTC reached a new high above $80,000 on August 25 after increasing by 28% over the month, while gold climbed to a three-month high. The contrast between the two assets is evident in market structure, with spot funds recording about $1.92 billion of net inflows in the week through August 21.

The cumulative net inflows since launch reached roughly $54.1 billion by August 24. Regulation also played a role, as the US Securities and Exchange Commission proposed a tailored framework for certain crypto-asset investment contracts in August, adding another variable to the BTC vs XAU trade.