Consequently, assets that hold buying power, such as gold and Bitcoin, would favor under these conditions. Amid this backdrop, gold reached a new all-time high of $4,059.38 on Oct. 10.
But if gold is benefiting from the debasement trade, why is Bitcoin down by 4.2% on the week?
The US dollar is up by 1.3% on the week as of press time, approaching what could be its best weekly close since mid-November 2024.
Traders began de-risking mid-week when chatter about a stock bubble surfaced in the markets, fueled by stocks trading near their all-time highs.
The macroeconomic developments affected one of Bitcoin’s major supports for price action, namely the demand from exchange-traded funds (ETFs).
Despite pulling over $1.2 billion on Oct. 6, the second-largest daily inflows on record, Bitcoin ETF flows subsided to $875.6 million the following day.
On Oct. 10, the Trump threat prompted a risk-off wobble, triggering long liquidations totaling $807 million over 24 hours, with $580 million wiped out in just four hours.
Despite the current choppy backdrop, Bitcoin still appears poised to perform strongly in the fourth quarter.
The equity pause, volatile haven bid, and end-of-week trade shock reduced investors’ urgency to add at highs.
Additionally, Bitcoin’s consolidation reflects profit-taking after a 7% rally to $126,000 rather than deteriorating fundamentals.
The debasement narrative persists, but positioning cleanup and flow dynamics will likely dictate near-term price action before macro tailwinds reassert control.
