Bitcoin News Today: Why Banks Are Now Betting Big on Bitcoin and Gold as Fiat Fades

Arthur Hayes, co-founder of BitMEX, has intensified his critique of traditional finance (TradFi) for its delayed recognition of the "debasement trade," a strategy centered on allocating capital to scarce assets like Bitcoin and gold to hedge against fiat currency erosion. Hayes argues that institutions have taken nearly two decades to embrace crypto as a tool for combating inflation and sovereign debt risks, a shift he describes as both overdue and irreversible. His comments align with growing market data showing Bitcoin and gold moving in tandem as global debt levels approach $38 trillion and central bank policies fuel concerns over currency devaluation.

Hayes' analysis positions Bitcoin as a "stored energy" asset, contrasting its fixed 21 million supply with the unlimited issuance of fiat currencies. He emphasizes that Bitcoin's value is derived from energy consumption and production, framing it as a tangible hedge rather than speculative digital commodity. This perspective is supported by market trends: Bitcoin has surged past $125,000 in 2025, while gold breached $4,000 per ounce, marking a 45.2% annual increase. JPMorgan analysts have similarly noted Bitcoin's undervaluation relative to gold, projecting it could reach $165,000 under certain macroeconomic conditions.

The institutional adoption of the debasement trade is accelerating. CME Group, a leading derivatives market, announced plans to expand 24/7 trading for crypto futures and options by early 2026, reflecting heightened demand for round-the-clock hedging tools. Meanwhile, spot Bitcoin ETFs-approved in January 2024-have drawn substantial inflows, with over $440 million in BTC and $69 million in ETH added to ETFs in October 2025 alone. These developments underscore a broader realignment in portfolio strategies, as investors increasingly prioritize assets with hard supply caps to counteract monetary expansion.

Market dynamics further validate the debasement trade's legitimacy. NewHedge data shows Bitcoin and gold's 30-day rolling correlation has strengthened since 2022, with both assets rising in parallel amid inflationary pressures. Institutional allocations to crypto and precious metals are also growing, with central banks in emerging markets and BRICS nations accumulating gold to diversify reserves away from the U.S. dollar. Citadel CEO Ken Griffin and Eurizon SLJ Capital have highlighted the U.S. dollar's declining credibility as a driver of capital flight, noting that geopolitical tensions and fiscal imbalances are amplifying demand for alternative stores of value.

The long-term implications of this shift are profound. Analysts suggest that traditional financial firms may launch new products, including crypto ETFs and structured derivatives, to cater to evolving investor needs. Regulatory frameworks are also adapting, with the CFTC integrating Nasdaq's surveillance tools to enhance transparency in crypto markets. However, challenges remain, including the volatility of cryptocurrencies and the need for clearer governance in a multi-currency world. Hayes warns that the debasement trade is structural, not cyclical, and predicts banks will continue leveraging it to offer clients macroeconomic hedges.

Source: [1] Arthur Hayes Claims That Banks Embrace the Debasement Trade (https://cryptotale.org/arthur-hayes-claims-that-banks-embrace-the-debasement-trade/)

[2] Bitcoin and Gold Surge Amid U.S. Dollar Distrust (https://coinlineup.com/bitcoin-gold-surge-us-dollar-distrust/)

[4] Leading TradFi Derivatives Marketplace CME Group (https://finance.yahoo.com/news/leading-tradfi-derivatives-marketplace-cme-180934285.html)

[5] 3 More Signs Crypto Adoption Is Being Driven By (https://www.forbes.com/sites/digital-assets/2025/08/31/3-more-signs-crypto-adoption-is-being-driven-by-institutions/)

[6] The Great Monetary Exodus: Gold and Bitcoin Soar as Faith in Fiat (https://markets.financialcontent.com/bpas/article/marketminute-2025-10-8-the-great-monetary-exodus-gold-and-bitcoin-soar-as-faith-in-fiat-fades)