Gold at $4,000: Is the ‘debasement trade’ about to flood BTC ETFs?
Gold pushed by $4,000 per ounce for the first time this week, validating a macro narrative that’s spilling into Bitcoin demand and positioning spot ETFs for document fourth-quarter flows.
The “debasement commerce” entails traders shifting their holdings from fiat-denominated money and bonds into property that retain buying energy when authorities debt is high or forex credibility is in query.
Investors buy scarce property, akin to gold, Bitcoin, and actual commodities, to hedge towards forex erosion when financial coverage loosens or fiscal slippage accelerates.
The logic utilized is that if the forex’s actual worth is eroding, the reply is proudly owning issues that can not be printed.
Additionally, actual yields have wobbled as fiscal dangers mount, and the US cash provide has elevated 44% since 2020, creating situations that favor scarce property.
Getting into gold’s draft
Gold’s surge crystallized the hedge narrative. Analysts attributed the rally to rising considerations about public debt, a protracted US authorities shutdown, and protracted demand for safe-haven property, with central financial institution shopping for and ETF inflows reinforcing the transfer.
Bitcoin has been talked about alongside gold as a substitute to hedge towards debasement, and flows affirm this connection.
Last week, spot Bitcoin ETFs recorded $3.5 billion in internet inflows, with a complete of roughly $5.9 billion flowing into crypto funds general. This is a document for each Bitcoin and crypto merchandise when it comes to weekly flows.
The timing displays shared drivers. Gold’s break above $4,000 validates the macro hedge bid and widens the viewers for hard-asset publicity.
Meanwhile, ETFs make Bitcoin the marginal recipient as a result of they take away custody and operational friction for US establishments.
The co-movement in narratives and fund flows has been evident, even when the property don’t observe one another on an hour-to-hour foundation.
Part of a bullish case
Matthew Hougan, chief funding officer at Bitwise, revealed a word on Oct. 7 outlining three catalysts for a robust fourth quarter in Bitcoin ETF flows.
The first is platform approvals. Hougan talked about Morgan Stanley’s report, stating that monetary advisors and purchasers at the agency could now allocate to crypto as a part of multi-asset portfolios, suggesting allocations of up to 4% for risk-tolerant traders.
Morgan Stanley’s 16,000 advisors handle $2 trillion. Additionally, Wells Fargo, with roughly $2 trillion in property underneath administration, additionally lately allowed advisors to allocate on behalf of purchasers.
Hougan famous that new steerage takes time to be processed throughout tens of hundreds of economic professionals, however conversations with advisors point out a critical pent-up demand. He expects significant flows in the fourth quarter as these approvals translate into allocations.
The second catalyst is the debasement commerce itself. Gold and Bitcoin are the best-performing main property in 2025, with JPMorgan publishing a report on the debasement trade on Oct. 1.
Hougan argued that when advisors conduct year-end critiques with purchasers, they need portfolios to replicate the 12 months’s most profitable investments. He added that final 12 months, it meant Nvidia, and this 12 months, it means gold and Bitcoin. He expects sturdy flows by year-end as advisors place for annual reporting.
The third catalyst is value momentum. Bitcoin broke by $100,000 and reached an all-time high above $125,000, gaining 9% in the first week of October alone.
Higher costs usually lead to elevated demand for Bitcoin ETFs, as media protection and investor consideration rise. Hougan famous that in each quarter the place Bitcoin posted double-digit optimistic returns, ETFs recorded double-digit billions in inflows.
Bitcoin ETFs have attracted $25.9 billion in internet inflows by the first 9 months of 2025, placing them on tempo for roughly $30 billion by year-end.
That complete would fall wanting the document $36 billion in 2024. Hougan tasks that platform approvals, debasement-trade positioning, and value momentum will push fourth-quarter flows above $10 billion, setting a brand new annual document.
The debasement narrative ties these components collectively. Gold at $4,000 validates the currency-hedge thesis, platform approvals increase distribution, and Bitcoin’s value surge captures consideration.
Bitcoin feels the identical macro strain that drives gold, with spot ETFs offering a frictionless channel for allocators to specific that hedge by digital rails.
As quickly as extra traders acknowledge this, a brand new wave of capital may flood Bitcoin.
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