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Investors Pour $7 Billion Into Gold and Bitcoin as Debasement Trade Surges

Heavy ETF buying and Treasury moves to support long bonds have pushed money into scarce assets that investors view as a hedge against rising deficits and a weaker dollar.

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Overview

  • About $7 billion flowed into gold and Bitcoin ETFs over five U.S. trading sessions, with SPDR Gold Shares (GLD) taking roughly $3.4 billion and BlackRock’s iShares Bitcoin Trust (IBIT) about $1.5 billion, concentrating the move in the largest funds.
  • The rotation accelerated after the U.S. Treasury said on Aug. 19 it would at least double long‑bond buyback operations to $4 billion per operation, and officials reportedly discussed using the Treasury General Account to buy long bonds outright.
  • The inflows coincided with price milestones as Bitcoin rose above $80,000 and gold traded above $4,600 an ounce, and the 90‑day rolling correlation of their daily returns climbed to about 0.5.
  • Market strategists say the flows reflect a revived 'debasement trade' driven by concern over $40 trillion of public debt and policy steps that could ease long yields and weaken the dollar, but they note buybacks are small versus the full Treasury market.
  • If sustained, the shift could nudge portfolio construction toward scarce, non‑dollar assets and raise the chance that gold and Bitcoin move together more often, yet durability will hinge on future Treasury actions, Fed policy, economic data and volatility in Bitcoin.