🔻The Debasement Trade Is Not Working For Bitcoin: Cable FX Macro

• 2025 staged a clear downtrend for the dollar, the greenback posted its worst year in almost a decade against G10 peers. A debasement theme has been pressuring the greenback as foreign investors diverse away from U.S. assets. EM currencies and metals benefited from this dynamic too, spot gold intensified its rally and moved past $5,000.0/oz.

• Alternative assets like bitcoin have underperformed in an environment where most assets are rising against the U.S. dollar. Unlike fiat currencies or even gold, Bitcoin's supply is mathematically capped at 21 million coins, making its long-term inflation rate predictable and structurally lower than gold's. In fact, the cryptocurrency is often called “digital gold.”

• However, the strong correlation to risk is questioning this so-called safe haven profile often given by the crypto enthusiast. It is much more volatile than gold and its correlation coefficient to the S&P 500 index has reached levels above 0.9, which essentially puts it in the high-beta watch list.

• Gold has significantly outperformed Bitcoin over the past year, showcasing its enduring status as a safe-haven asset in times of economic uncertainty. Throughout this period, gold has demonstrated remarkable resilience, driven by various factors including inflationary pressures, geopolitical tensions, and shifts in investor sentiment.

• Bitcoin is currently undervalued relative to gold by historical standards. The ratio is trading at multi-year lows.