Does the Bitcoin 'Debasement Trade' Narrative Still Hold Up After the Crash?
Bitcoin surged to over $126,000 before plunging below $110,000 after President Trump threatened new tariffs on China, causing a record $19 billion in leveraged crypto futures liquidations. Bitcoin has since partially recovered to $113,494. Gold simultaneously set a record at $4,099 per ounce. The “debasement trade”—investing in assets like Bitcoin and gold to hedge against currency debasement caused by government debt and money printing—remains intact despite crypto volatility. Experts argue that unless real interest rates rise significantly or there’s major institutional outflow, Bitcoin’s momentum as a hedge will continue. Historically, Bitcoin has benefited from expansionary U.S. monetary policy. Major altcoins such as Solana and XRP have fallen over 30% from recent highs but are expected to rebound if the debasement trade persists. Short-term volatility may continue, but the outlook for digital assets remains positive as long as fiscal discipline and high real rates do not return.
