US federal debt passed $40 trillion in August 2026, and Treasury's response of long-term debt buybacks has pushed investors toward gold and Bitcoin. Gold options show heavily bullish positioning, while research from Bitwise and Nansen points to stronger risk-adjusted returns when gold and Bitcoin are held together.
The US government's debt crossed $40 trillion in August 2026, and the Treasury Department answered with extensive long-term debt buybacks. Treasuries fell and the dollar weakened, and investors moved into gold and Bitcoin as a result.
Gold options turn overwhelmingly bullish
Gold prices rose in late August as the dollar weakened. Options data as of mid-September shows a more than 5:1 ratio of calls to puts on SPDR Gold Shares, a lopsided bullish tilt. Bitcoin ETF options, by contrast, show a far more balanced split between bullish and bearish bets.
The gap in positioning reflects where each asset sits in the institutional pecking order. Bitcoin has drawn institutional money through spot ETFs and corporate treasury allocations, but it still behaves as a high-beta asset. When markets sell off hard, Bitcoin has historically sold off harder.
Blending gold and Bitcoin improves the math
Bitwise research found that a 15% allocation split between Bitcoin and gold achieved a Sharpe ratio of 0.679, nearly triple the Sharpe ratio of a traditional 60/40 stock-and-bond portfolio. Nansen's research reached a complementary conclusion, pointing to better risk-adjusted returns from allocations blending both digital and physical hard assets.
Exchange-traded funds tracking both gold and Bitcoin have seen increased inflows amid the fiscal turbulence, institutional flows that mirror the options positioning. The 90-day correlation between Bitcoin and gold hit multi-year highs in early September, surpassing 0.5, underscoring how closely the two assets are now trading as a single debasement trade.
Source: Crypto Briefing
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