Bitcoin is up over 50 percent since the November U.S. elections that marked the start of a decidedly pro-crypto presidential agenda. Alongside bitcoin’s gains, however, came double-digit gains in gold and other precious metals (Figure 1). On Wall Street, these rallies are being grouped together as the “debasement trade,’’ a bet that loose fiscal policy and political risk will erode the value of fiat currencies like the dollar and other traditional safe havens like the euro or the yen. But a closer look at the data tell a different story: bitcoin’s latest surge doesn’t look like a hedge against debasement at all.

After decades of serving as global reserve currencies, investors may be positioning themselves against fiat currencies and the risk of excessive government borrowing and money creation, or political interference with central bank independence. Some see bitcoin, like gold, as a hedge under this narrative: a scarce, counterparty-free, decentralized asset that can preserve value in inflationary or politically unstable environments.

Bitcoin’s Correlations

But is debasement risk really the force driving bitcoin higher? Bitcoin and gold prices should move together, reflecting the same underlying forces, if that was the case. Bitcoin would also tend to rise when the U.S. dollar or government debt values fall, reflecting the rotation away from fiat and toward “hard” assets. Examining bitcoin’s correlations with other assets can therefore help reveal whether debasement fears are truly behind its rally.

Figure 2 plots correlation coefficients of daily bitcoin price changes with those of several major assets, using daily price data from November 5, 2024 through October 15, 2025.

A correlation coefficient ranges from –1 to +1, with:

• +1 indicating perfectly aligned movements,
• –1 indicating perfectly opposite movements, and
• 0 meaning no relationship at all.

Over this period, bitcoin’s daily price changes have been nearly uncorrelated with gold (0.007), suggesting that the two assets have risen for different reasons. In contrast, gold and silver price changes have been highly correlated (a coefficient of 0.652).

The debasement narrative would also imply a strong negative correlation between bitcoin and the U.S. dollar. Yet bitcoin’s correlation with the dollar is barely positive at 0.049, while gold’s correlation with the dollar is -0.418, about ten times stronger and directionally consistent with the debasement thesis. To put it simply, bitcoin’s price isn’t any more likely to rise when the dollar falls, whereas the price of gold is much likelier to rise when the dollar falls.

Bitcoin’s movements have also been nearly uncorrelated with U.S. Treasuries (–0.034). In contrast, it has shown stronger co-movement with cyclical commodities like oil and copper. Taken together, these patterns don’t align well with the idea that bitcoin’s rally is primarily a response to currency debasement fears.

Risk Hedge or Risk-On?

So what’s behind bitcoin’s strength this year?

The data seem to point toward bitcoin’s notably high correlation with U.S. equities, especially technology stocks (0.414). Tech stocks have also staged a rally this year, likely from optimism around AI-driven investment and innovation. Day-to-day changes in bitcoin prices have tracked those of high-growth equities far more closely than gold.

This pattern suggests that bitcoin’s rally is more about rising risk appetite than a flight from fiat. Consistent with this, bitcoin has shown a strong negative correlation with the VIX index (-0.362), which is a measure of market volatility based on equity index options that tends to go up when stock prices fall. Similarly, bitcoin has been positively correlated with risky high-yield credit (0.352).

Bitcoin’s correlations can and will change over time, especially as the market matures and new regulations enable further integration with traditional financial markets. Previous reports from the International Monetary Fund show that bitcoin was also more correlated with equities and high-yield credit than gold in periods like 2020 and 2021. However, bitcoin did bear a somewhat stronger correlation with gold from 2017 to 2019, when the market was less integrated.  

Bitcoin may share gold’s “anti-establishment” image, but its recent performance has looked much more like a risk asset than a store of value hedge. For now, bitcoin’s rally appears to be powered not by debasement concerns, but by a broader reawakening of investor risk appetite. While bitcoin has rallied alongside gold this year, investors shouldn’t mistake this as proof it thrives under political turmoil or currency debasement.