Bitcoin and gold ETFs saw a net inflow of $7 billion over the past five days, as investors bet on a potential dollar crisis

Bitcoin and gold ETFs saw a combined inflow of approximately $7 billion over five trading days, setting a new record for the highest amount ever recorded. SPDR Gold Shares (GLD) received about $3.4 billion, while BlackRock's iShares Bitcoin Trust (IBIT) attracted approximately $1.5 billion. With assets under management exceeding $150 billion, GLD and approximately $60 billion for IBIT, both serve as key entry points for institutional investors in their respective markets, and the two funds accounted for roughly 70% of the total inflows into the "dollar devaluation trade." Eric Balchunas of Bloomberg Intelligence described this five-day period as a clear all-time high for the combined performance of the two assets, and added that IBIT's cumulative inflows since the beginning of the year have recovered from a previous deficit to a positive value. During this period, the price of Bitcoin exceeded $80,000, while gold surpassed $4,600 per ounce, clearly demonstrating a connection between the two assets driven by a similar narrative of scarcity. The surge in capital inflows was largely due to a policy change by the U.S. Treasury Department. On August 19th, the Treasury announced an increase in the maximum amount of liquidity support buybacks for long-term securities, doubling the previous limit to $40 billion per transaction. This decision was made against the backdrop of the U.S. national debt already exceeding $40 trillion. Initially, this measure had the effect of lowering long-term interest rates and stimulated demand for what is known as "dollar devaluation trading," as investors sought to hedge against the expansion of fiat currency and the decline in purchasing power. Bitwise CIO Matt Hogan pointed out that traditional 60/40 portfolios are fully exposed to legal tender, and that investors are seeking appropriate diversification strategies in the face of increasing financial uncertainty. Strive CEO Matt Cole argued that the decline in the value of the dollar is creating a pool of capital seeking assets with limited supply, and that the continued monetization of Bitcoin is absorbing an increasingly large share of this demand. Bernstein analyzed that, at a time when the decades-long trend of declining interest rates has ended, national debt burdens have reached record levels, and that increasing interest costs could create a vicious cycle of expanding deficits. Bernstein anticipates that policymakers will choose monetary expansion over fiscal austerity, and that in this case, the attractiveness of assets that are difficult to increase in supply will be enhanced. Bernstein assessed that Bitcoin is in a particularly advantageous position due to its fixed issuance, broad accessibility for both institutions and individuals, and the strong base of holders who have weathered declines of over 50%. The firm also estimated that approximately 60% of Bitcoin holders have withstood drops of more than 50%. BlackRock, in a research report released this month, brought the discussion to the level of portfolio construction by revealing historical modeling results showing that a 1-2% allocation to Bitcoin improved the risk-adjusted returns of a traditional 60/40 portfolio. Charlie Morris, founder of ByteTree, pointed out that both Bitcoin and gold are showing an upward trend with a 200-day moving average and a ByteTrend score of 5, while the dollar is at 0. It remains to be verified whether this recent inflow represents a structural change or a short-term trend. If the inflow into Bitcoin ETFs continues even as the dollar strengthens or real interest rates rise, it can be interpreted as a sustained shift in portfolio composition. Conversely, if gold remains stable while Bitcoin demand weakens, it suggests that both assets benefited briefly from a similar narrative, but that Bitcoin has not been recognized as a true safe-haven asset.