The past several days were quite eventful in all financial markets as volatility returned due to several macro factors. Unlike most previous occasions, bitcoin was on the right side of history this time, staging a massive rally that drove it higher by $15,000 within 48 hours or so before it was stopped at $80,000. At the same time, gold experienced some gains too, surging to almost $4,600 per ounce.
These simultaneous moves are particularly interesting because the two assets spent much of 2026 struggling at different times. The analysts at the Kobeissi Letter, though, said investors may now be witnessing the return of a familiar trader: buying scarce assets as protection against currency debasement.
BTC and Gold Stand Together
The precious metal dipped below $4,000/oz earlier this summer after peaking at $5,600 in January, which was its all-time high. BTC, on the other hand, was rejected at $97,000 in January, slumped to a multi-year low at under $58,000 by July 1, spent the next month and a half trading sideways above $60,000 before it finally exploded to nearly $80,000 on Friday.
The Kobeissi Letter highlighted the broader trend, arguing that the “asset owner economy” is expanding as scarce assets start to appreciate. The latest moves from bitcoin and gold are particularly notable given the change from just weeks ago.
It’s worth noting that gold has solidified its position as the world’s largest financial asset, with a market cap of over $32 trillion as it added $4.5 trillion in the past few days alone. BTC, on the other hand, has surpassed Tesla and it’s now the 12th-largest in this ranking, with a market cap of $1.550 trillion.
So Why The Rallies Now?
The most obvious and immediate catalyst appears to come from the US Treasury market. As reported earlier, Treasury Secretary Scott Bessent surprised Wall Street on Wednesday by announcing that the government would at least double its purchases of long-dated US government debt, increasing buybacks of 10-to-30-year-securities to $4 billion per operation or more.
Longer-term yields were pushed lower initially after the statement, but it also pressured the greenback. This matters because investors have become increasingly concerned about America’s fiscal position since the government debt recently surpassed $40 trillion. At the same time, the budget deficit remains above 6% of GDP, and annual interest expenses are running at roughly $1.2 trillion.
The dollar is down by around 1%-2% this week, touching a three-month low. This combination has revived what markets frequently refer to as “debasement trade” – buying scarce assets such as gold and bitcoin, expecting that growing debt, persistent inflation, and policy intervention could gradually reduce the purchasing power of fiat currencies.
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