Investors just moved a document $7 billion into gold and Bitcoin (BTC) funds in 5 days. Bitwise CIO Matt Hougan blames a flaw in the 60/40 portfolio, which is 100% uncovered to fiat currency.
Bloomberg senior ETF analyst Eric Balchunas calls it the debasement commerce, a guess on property no authorities can print. This week, that guess pushed AI funds out of the headlines.
Why the 60/40 Portfolio Is Suddenly Under Fire
SPDR Gold Shares (GLD) took in $3.4 billion in the week through August 21. BlackRock’s iShares Bitcoin Trust (IBIT) added just over $1 billion, information exhibits.
Meanwhile, the VanEck Semiconductor ETF (SMH) bled $1.7 billion, more than any other fund. Money did not depart the market. It switched sides.
“DEBASER: Gold and Bitcoin ETFs have combined for +$7b in flows in past week, by far a record for a 5-day period as debasement trade steals spotlight from AI. GLD, IBIT leading, in Top 10 for week. Also notable $IBIT YTD flows are now positive, completely dug out of sizable hole,” Balchunas shared.
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Hougan’s reply equipped the principle, indicating that a 60/40 portfolio holds 60% shares and 40% bonds. However, both halves are guarantees priced in {dollars}. Neither one protects buyers if the greenback itself loses worth.
Investors have seen this weak point before. In 2022, shares and bonds crashed collectively, and the 60/40 combine lost about 18%. That was its worst 12 months since 1937.
Treasury Buybacks Reignite the Debasement Trade
The set off sits in Washington. US debt crossed $40 trillion on August 19. Days earlier, the 30-year Treasury yield hit 5.337%, its highest since 2007.
Treasury Secretary Scott Bessent answered by doubling long-bond buybacks to at least $4 billion per operation, beginning September 9. Markets learn that as a plan to cap yields while deficits keep vast. That studying hurts the greenback and helps scarce property.
Central banks made this swap first. By late 2025, gold reached 27% of their reserves and overtook US Treasuries at 22%, European Central Bank figures show. The world’s most conservative buyers have already made room for exhausting property.
Bitcoin now trades close to $79,144, up 0.55% in 24 hours. Gold’s foremost ETF is up about 8% in 2026 after a weak summer time. IBIT, in distinction, is still down roughly 10% this 12 months.
The comeback is younger, too. IBIT was nursing a 33% loss as just lately as June. Then each day Bitcoin ETF inflows hit $606 million on August 20, the largest single day since May 1.
The first expanded buyback lands on September 9. If the hard-asset flows proceed previous that date, buyers are actually rebuilding their portfolios. If they stop, this was one loud week in the bond market.
Read the Original story Your 60/40 Portfolio May Be 100% Exposed to a Dying Dollar, Bitwise Says by Lockridge Okoth at beincrypto.com