Bitcoin fails to replicate gold’s store-of-value status as debasement trade accelerates
Gold has surged 10 per cent in ten days as the Federal Reserve signals easing, but Bitcoin has not followed, highlighting a persistent perception gap between the asset’s marketing and its price action.
Former International Monetary Fund economist Robin Brooks has challenged the narrative of Bitcoin functioning as a reliable store of value, arguing that the cryptocurrency has significantly underperformed gold since the Federal Reserve began signalling a monetary easing cycle. Brooks contends that while gold has capitalised on currency debasement narratives, Bitcoin has failed to capture similar upside, suggesting the asset lacks the safe-haven status traditionally associated with precious metals.
The divergence in performance has become increasingly visible in recent weeks. Gold has gained 10 per cent over the past ten days, a rally Brooks attributes to investors rotating into assets that hold value outside the traditional financial system as central banks signal looser policy. In contrast, Bitcoin has not followed suit, leading Brooks to post on X that the cryptocurrency "isn't part of the debasement trade." He traced the onset of this debasement cycle back to last year’s Jackson Hole meeting, where Federal Reserve Chair Jerome Powell first indicated the beginning of an easing phase.
Further fuel for gold’s recent strength came from dovish inflation commentary delivered by Federal Reserve Governor Kevin Warsh at the July 29 FOMC meeting. Brooks argued that the lesson from this price action is clear: Bitcoin is not a safe haven or store of value in the same manner as gold. He described this distinction as a matter of perception that is now being validated by market data, noting that the perception gap between Bitcoin’s marketing as "digital gold" and its actual behaviour has never been more visible.
Not all market participants agree with this framing. Jeff Park of Bitwise disputed Brooks’ view, asserting that Bitcoin actually rallies during both bull and bear yield curve steepeners. Park argued that the cryptocurrency captures upside from both currency debasement and dedollarization simultaneously, pointing to five specific periods since 2020 where Bitcoin performed strongly under these varying macro conditions. These periods included March 2020, February 2021, March 2023, September to October 2023, and September 2024.
Macro investor Raoul Pal has offered a different perspective on Bitcoin’s price drivers, highlighting an 87 per cent correlation with global liquidity. Pal’s analysis suggests that Bitcoin’s moves are less about safe-haven perception and more about the total amount of money in the system. This framework implies that Bitcoin acts as a liquidity amplifier rather than a direct substitute for gold, swinging harder around the same macroeconomic lines that gold trades on.
The debate underscores a fundamental question regarding the institutional categorisation of digital assets. While Brooks identifies a real and persistent perception gap, the extent to which this gap closes will likely depend on whether further institutional adoption eventually rewires how markets view the asset’s role in a portfolio. For now, the price action suggests that when debasement narratives take hold, gold remains the primary beneficiary.
This story was originally published by TheStreet on August 10, 2026.
