Bitcoin surged to a multi-month high of $82,262 on Thursday before trimming its gains. The asset is increasingly trading as an amplified version of gold rather than a risky technology stock.
Treasury Buybacks and Currency Debasement Risks
Investors are fleeing market volatility. They are treating the largest cryptocurrency as a traditional store of value amid rising currency debasement risks, according to André Dragosch, Bitwise’s director of research for Europe.
This price upswing follows proposed fiscal maneuvers from United States Treasury Secretary Scott Bessent. Bessent outlined a plan to increase Treasury buybacks of long-dated bonds.
That announcement coincided with the 30-year yield hitting its highest level in nearly two decades in late May.
A Six-Year High Correlation With Safe Havens
These pressures pushed Bitcoin’s 90-day correlation with gold near a six-year high, according to Dragosch’s note to clients.
“When things get serious and macro forces are strong, investors are discriminating less and less between bitcoin and gold as they navigate rising currency debasement risks,” Dragosch wrote.
He added that Bitcoin has recently started to look like an amplified version of gold. This behavior marks a sharp contrast with earlier in the year. Back then, the cryptocurrency traded primarily as a risk-on asset tightly correlated with technology stocks.
However, Dragosch warned of a catch. This high correlation with traditional safe havens and fiat currency dynamics mirrors conditions last seen in 2020. That was when central banks worldwide unleashed massive stimulus packages during the COVID-19 pandemic.
The Four-Year Halving Cycle Under Scrutiny
Fidelity’s fourth-quarter crypto market outlook points to the four-year cycle theory. This theory suggests Bitcoin’s bear market lows and bull market tops occur in four-year increments.
If the historical pattern holds, Bitcoin’s next bear market bottom could arrive in November. That is exactly four years after the market bottomed in November 2022. The cycle theory is closely linked to Bitcoin’s halving events, which systematically reduce the rewards distributed to blockchain miners.
Alex Thorn, Galaxy’s head of firmwide research, outlined similar historical analogies in a June report. Thorn projected a base-case bottom for the current drawdown between $40k-46k. This could occur sometime between June and the fourth quarter of 2026, though he emphasized the projection was not a direct price prediction.
Weighing Macro Pressures Against Long-Term Horizons
While historical cycles point toward potential downside risks, industry executives note that timing models remain imprecise. Chris Kuiper, vice president of research at Fidelity Digital Assets, stated in the firm’s fourth-quarter report that the four-year cycle does not guarantee an immediate downslide later in the year.
“In light of this, having a long-term perspective and holding period is what has historically been the most beneficial for investors,” Kuiper wrote.
As of Friday afternoon, Bitcoin was down 2% at approximately $79,800. The cryptocurrency still sits near its highest price point since May, recovering significantly from a tight trading range between $60,000 and $70,000 held since early June.
Even so, traders continue to weigh short-term macroeconomic safe-haven demand against long-term historical cycle models.
>