On Aug. 19, the U.S. Treasury Department said it would at least double its repurchases of 10- to 30-year debt, an intervention the market promptly reversed. Bitcoin (BTC +0.18%) started to surge, as did the SPDR Gold Shares ETF (GLD -0.05%), which tracks the price of gold -- a continuation of a shift that had already been building for weeks, reversing many months of the two assets tending to move in different directions in response to the same economic stimuli.
That parallel movement in response to government actions affecting the money supply is exactly what the as-yet-unproven "digital gold" thesis about Bitcoin predicts. In fact, CryptoQuant chief executive Ki Young Ju flagged in mid-August that Bitcoin's 90-day correlation with gold has once again swung from being negative in early 2026 to being strongly positive now. So is the digital gold thesis back on the menu, and if so, what would that mean for investors?
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This is a separate issue from the price going up
Assets can be correlated whether their price is rising or falling at the same time. There isn't anything inherently bullish or bearish about Bitcoin regaining its correlation with gold.
That's relevant here because much of this correlation shared by gold and Bitcoin was produced by a period of mutual decline. Gold's price peaked in January and then retraced by the middle of the summer, whereas Bitcoin spent the same stretch in the doldrums.
Furthermore, there's still a lot to be said for gold which doesn't apply to Bitcoin and vice versa.
CRYPTO: BTC
Key Data Points
For instance, Bitcoin's volatility makes it hard to depend on as a store of value at any specific moment, whereas gold is generally not prone to wild swings in its price. The idea that Bitcoin is a form of digital gold, while loosely valid in terms of its fixed supply, scarcity, and widespread acceptance as a form of value, is not something that investors should take too literally even if the same economic drivers are leading investors to buy both right now.
Now, let's turn to those drivers.
The bond market is sparking demand here
Neither gold nor Bitcoin pays interest as a bond does. When bond yields drop, the opportunity cost of holding non-yielding assets drops too.
When the Treasury said that it'd be doubling its Treasury bond repurchases, that effectively means it plans to put downward pressure on the yield of those bonds, an operation it funds by swapping older long-dated debt for newer short-dated issuance. Without that additional pressure, yields would more readily rise to reach the market-clearing level, as buyers are only willing to buy bonds that yield sufficiently to compensate them for the perceived level of risk of the investment.
NYSEMKT: GLD
Key Data Points
In a nutshell, the Treasury Department is taking actions that many investors perceive as increasing the risk of Treasury bonds by way of artificially distorting the market for them.
If that kind of financial engineering persists, it could well revive Bitcoin as a digital alternative to gold as a store of value. But whether or not that revival happens, it's still reasonable to hold both assets, as neither can be printed like dollars.
