Bitcoin and gold move in lockstep as debasement trade gains more steam

Bitcoin’s 90-day Pearson correlation coefficient with gold reached an all-time high, and the 30-day metric reached a yearly high of 0.8. The correlation coefficient measures how closely two assets’ prices move together; the higher the figure, the more the prices resemble one another.

This metric is important for BTC. For most of this year, bitcoin (BTC) has correlated with gold and equities to the downside, meaning when stocks drop, Bitcoin drops, but when stocks go up, bitcoin doesn’t perform as well.

This recent price appreciation in bitcoin and gold has been fueled by the debasement narrative. The notion is that the dollar and effectively all government-backed assets will lose value, and investors are looking for shelter in hard assets. Traditionally, this shelter has been in gold but has recently expanded to include bitcoin. Indeed, some macro analysts suggest the U.S. faces a set of challenges that make debasement inevitable.

Both gold and bitcoin ETFs have been among the strongest, with both ETFs in the top 10 by inflow. Last week, Bitcoin ETFs drew nearly $1 billion in inflows. Despite a few strong weeks of inflows, Bitcoin ETFs are still sitting at $1.89 billion year to date. However, individual ETFs, including BlackRock's IBIT, are up $1.2 billion in inflows for the year.

The bitcoin and gold correlation spiked previously in Q4 2020 and Q4 2022. For bitcoin, a strong rally followed this spike both times, suggesting an early bull-market indicator. When bitcoin decorrelates with gold after these spikes is when the bull market truly begins.

In 2020, bitcoin gained 172% after its gold correlation reached 0.6 and subsequently dropped. In Q4 2022, BTC-gold correlation rose from roughly 0 to 0.5. Bitcoin then rallied nearly 350% in the 14 months that followed.

Getting greedy?

Meanwhile, the Fear and Greed Index measures market sentiment on a 0-100 scale, with 0 being fearful and 100 being greedy. The metric is currently sitting at 68, which is considered greedy, after setting a low of 5 this year in extreme fear.

The index focuses on bitcoin and aims to capture factors such as volatility, market momentum/volume, social media sentiment, dominance and trends. While not the most violent shift in sentiment, this move is exceptionally sharp for an asset class the size of bitcoin.

We spent most of 2026 grinding through fear before going vertical between Aug. 17-21. The move ranks as the fourth-largest weekly move, with the index rising more than 10 points a day.

Despite a high fear-greed ranking, participants have observed that the market does not feel the same level of volatility or frothiness associated with a market top or blow-off event.

Indeed, 2026 has yet to break any records for Fear-Greed volatility, nor has it come close to the highest-range years. In 2026, the index rose from a low of 5 to a high of 74, a range of 69. This ranks sixth in the past nine years. The largest range belongs to 2019, when the index marked a similar low of 5 and reached an eye-watering high of 95, for a range of 90.

These measures show that despite the strong swing in the Fear and Greed Index, we still have much more room to go if we’re at the start of the bull market.