The debasement trade is working - just not through Bitcoin

AI summary

<p class="text-align-justify" style="text-align: justify;">For many years now, there has been one narrative that Bitcoin has sought to capitalise on. And that is if governments borrow too much, fiat currencies lose their purchasing power and investors will seek refuge in scarcer assets. That is the idea of the debasement trade.</p><p class="text-align-justify" style="text-align: justify;">Now with US government debt topping $40 trillion and long-term Treasury yields rising to multi-year highs, concerns around fiscal sustainability is becoming harder and harder to ignore. And it is not just in the US, we're also seeing that to be the case in Japan, Europe, and the UK.</p><p class="text-align-justify" style="text-align: justify;">As such, that very narrative for Bitcoin is being put into another real world test.</p><p class="text-align-justify" style="text-align: justify;">But as we're seeing since last year, the interesting part is that gold - and not Bitcoin - still looks to be the cleanest expression of the debasement trade.</p><p class="text-align-justify" style="text-align: justify;">The straightforward case for gold</p><p class="text-align-justify" style="text-align: justify;">Under normal circumstances, rising Treasury yields should be a problem for gold.</p><p class="text-align-justify" style="text-align: justify;">After all, gold pays no interest at the end of the day. And when investors can earn up to nearly 5% on government bonds, the opportunity cost of holding gold