Yeliz Akmaca 
On October 10, during the “Black Friday Crypto Crash,” Bitcoin (BTC) plunged sharply, wiping out roughly $19 billion in leveraged positions, while gold prices surged to record levels, surpassing $4,000 per ounce. At the time of writing, BTC is trading around $111,270.
Investors have flocked to safe-haven assets amid rising inflation concerns and uncertainty over the Federal Reserve’s independence. JPMorgan analysts have dubbed this shift the “debasement trade.”
Longtime Bitcoin critic Peter Schiff reiterated that gold remains the true store of value. Schiff said, “Bitcoin follows other risk assets… it is not a safe-haven store of value like gold. The world is moving from the dollar back to gold.”
Bitcoin: Safe Haven or Risk Asset?
BTC sharp decline coincided with rising global tensions. Trade disputes between China and the U.S., coupled with growing U.S. fiscal deficits, are rattling investors. According to JPMorgan, the macroeconomic environment remains favorable for debasement hedge strategies, with high inflation, mounting debt, and geopolitical uncertainty pressuring fiat systems.
Over the past week, Bitcoin fell 8% while gold gained nearly 6%, casting doubt on BTC’s safe-haven credentials. Users on X commented, “Debasement trade feels more like a meme now,” noting Bitcoin’s growing correlation with tech stocks rather than traditional inflation hedges.
Gold and Bitcoin: Is the Debasement Trade Still Relevant?
BTC proponents argue that gold and Bitcoin can complement each other as long-term stores of value against fiat risk. Paolo Ardoino, CEO of Tether, wrote on X, “Bitcoin and gold will outlast all other currencies.” On-chain data also shows increasing BTC-gold correlation, indicating that investors continue to hold both assets side by side in portfolios.
However, critics like Schiff warn that institutional inflows into Bitcoin ETFs could revert back to gold. He also cautioned that companies holding Bitcoin on their balance sheets might be forced to sell during downturns, adding further price pressure.
The Future of the Debasement Trade
As demand for non-fiat assets rises, investors’ time horizons and risk tolerance determine which asset they prefer. Gold benefits from centuries of trust and institutional legitimacy, while BTC offers digital portability and fixed supply but remains volatile and sentiment-driven.
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Gold: Safe haven, institutional trust, record prices
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Bitcoin: Digital portability, fixed supply, high volatility
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Debasement Trade: Long-term hedge strategy against inflation and fiat risk
This divergence between gold and Bitcoin forces investors to reconsider strategic decisions. Despite short-term volatility, the debasement trade debate remains relevant for long-term hedging strategies.
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