Gold and Bitcoin ETFs Take In Record $7B as Fiscal Concerns Grow
Gold and Bitcoin are becoming the market’s favorite hedge against a weakening dollar. The two assets saw a record $7B pour into their ETFs over five trading days after plans for more Treasury bond buybacks sent yields and the dollar lower. The move has strengthened demand for scarce assets as concerns over US debt and fiscal policy build.
- SPDR Gold Shares pulled in $3.4B for the week, second only to Vanguard’s S&P 500 ETF, while BlackRock’s Bitcoin ETF added $1.5B
- Gold is up ~14% in August, on pace for its best monthly gain since September 1999, as geopolitical tension and dollar weakness compound the fiscal fear trade.
Scarcity wins: Federal debt has topped $40T, adding fresh fuel to the debasement trade as investors question how long the US can keep borrowing at its current pace. Bridgewater’s Ray Dalio recommends holding gold and some Bitcoin as protection against a potential debt crisis, while Deutsche Bank sees gold climbing past $4.8k. Fundstrat’s Hardika Singh is less convinced, arguing stocks could ultimately prove the more reliable hedge.