Bitcoin (BTC) climbed as high as $81,165 on Tuesday before easing to $80,792, up 4.5% in 24 hours, as gold pushed to its highest price in more than three months. Both assets are climbing on the same forces.
A weakening US dollar and falling bond yields are pulling money into both gold and Bitcoin at the same time. Investors are also watching for signals on where interest rates head next.
Gold Extends Its Rally Toward a 27-Year High
Spot gold gained 0.6% to $4,677.19 per ounce on Tuesday, its best level since mid-May, with the metal up around 13% so far this month. Gold futures also touched a three-month high near $4,720.
Gold has been climbing for similar reasons as Bitcoin. Image Source: Trading Economics
UOB analysts pegged the move as golds best monthly performance since 1999, based on data cited in the report. The last comparable monthly surge came in September 1999, when a group of European central banks agreed to cap their gold sales, ending a prolonged slide in prices.
This months rally has a different driver, with investors reacting to a weaker dollar and renewed concern over Fed independence rather than a central bank supply shock.
The Dollar and Yields Are Doing the Heavy Lifting
The US Dollar Index has fallen 0.8% this month, making dollar-priced gold cheaper for foreign buyers. Treasury yields have stayed elevated through most of August, but the governments bond buyback plan has kept them roughly 3 basis points lower for the month, easing the opportunity cost of holding non-yielding bullion.
Bitcoin has moved in a similar direction. The asset briefly lost the $80,000 level last week as critics questioned the same Treasury buyback plan, before reclaiming it and pushing higher. A Strive executive recently pointed to Bitcoin‘s breakout against gold as evidence the asset’s bear market has ended.
Bitcoin has topped $81,000 briefly. Image Source: BeInCrypto
All eyes are now on Federal Reserve Chair Kevin Warsh, who speaks ahead of this weeks Jackson Hole symposium, an annual central bank gathering where officials often signal future policy direction.
A hawkish tone could stall both rallies. Citi analysts said a dovish surprise would instead push markets to refocus on the “debasement trade,” reflecting renewed concerns over Fed independence and US debt sustainability.
Bitcoin‘s reaction to this week’s Fed signals remains an open question, given the assets history of diverging from traditional safe havens even when the macro setup looks aligned. Both markets are now pricing similar risks.
A softer dollar and capped yields have driven the rally so far, and the Feds next move could decide whether it extends or stalls.