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Happy Wednesday,
This is your institutional newsletter, Crypto Long & Short. This week:
…and if you’re looking for bitcoin meets Broadway: Crypto is taking the stage in New York City. “Bitcoin Bad Boy,” a comedy by Ben Schiller, runs Oct. 15-25 at the Chain Theatre. The show centers around a family in debt, a coder who wants to build a better world and a memecoin. Learn more.
Thanks for joining us!
by Steve Neamtz, CEO, Yorkville America
Gold trading near $4,200 an ounce alongside bitcoin holding around $84,000 has revived a familiar argument: Should investors own gold or the “digital gold” alternative?
For 5,000 years, gold has demonstrated its value as a reserve asset. Bitcoin’s 17-year history offers far less empirical evidence. But the supply of both assets cannot be expanded by central bank or fiscal policymakers. Their shared scarcity thus takes on greater significance in a world awash in debt.
In the United States alone, the federal debt has climbed past $39 trillion. The U.S. now spends roughly $1 trillion a year simply servicing its existing debt, and the outlook is even more challenging for much of the developed world. Currencies often serve as the relief valve for fiscal concerns. The U.S. dollar, for example, has lost roughly 40% of its purchasing power over the past two decades.
Against this backdrop, it is important to understand where we believe supply-constrained assets fit within long-term diversified portfolios. A 2025 study in Resources Policy, using multifractal cross-correlation analysis across six asset classes — developed and emerging equities, bonds, commodities, energy and crypto — found that “neither gold nor bitcoin can be classified as a hedge or safe haven for financial markets” under rigorous testing.
That’s a finding about market-drawdown behavior — whether either asset reliably moves against stocks and bonds when markets fall. It says nothing about whether either holds value relative to a currency that is slowly, but steadily, depreciating against them. Investors and allocators buying gold or bitcoin often aren’t using them as shock absorbers. They’re making a debasement bet: that an asset independent of any government’s promise to pay provides diversification benefits.
On that bet, gold and bitcoin aren’t racing against each other — they’re at different points on the same course. Gold already has the custody, legal and reserve-eligibility infrastructure that lets central banks act on a debasement and reserve-currency diversification thesis today. Bitcoin doesn’t yet — at least not fully.
Gold’s lead reflects decades of built plumbing, not a stronger claim to the thesis. Bitcoin does not have the same penetration in terms of knowledge. It is earlier on the same curve, not a different one, and it often appeals to a younger generation of investors.
Central banks bought a record 289 metric tons of gold in the second quarter of 2026, after 244 metric tons in the first, according to data from an industry body funded by mining interests. This is worth flagging even as the pace of buying is independently corroborated elsewhere, and the clearest signal of where reserve managers are putting money and why. Bitcoin is being bought into the same thesis through a newer wrapper: spot ETFs, which solve the custody problem but not the sovereign-reserve status central banks need.
None of this requires picking a side. Central banks are buying gold on infrastructure that already exists; institutions are buying bitcoin on infrastructure still being built — the same debasement logic, two different stages. Financial media has already started calling it one trade, not two competing ones, as coverage of the “debasement trade” picked up through 2026. The right question for 2027 isn’t which asset wins. It’s how much of each diversifier belongs in a portfolio built for eroding purchasing power. The volatility is very different between gold and bitcoin, and we believe solutions that help investors with sizing these two anti-debasement assets will add value to portfolio construction efforts.
This week’s headlines show institutional crypto expanding through bank trading, regulated custody and national ETF access, while European regulators moved to force unauthorized stablecoins off trading platforms.
CHIP rebounds as USD.AI pivots to a loan factory
USD.AI active loans dropped ~22% to ~$311 million on Oct. 2 and have been flat since, while CHIP has rebounded ~35% since Oct. 1 to ~5.8 cents (still ~48% below its April high). The catalyst is GLX, a loan-factory model (originate, sell performing loans to institutions, recycle the capital), which could drive a rebound in active loans by recycling capital into new loans without a much bigger balance sheet.
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