Bitcoin (CRYPTO: BTC) is occasionally passed off as “digital gold,” but Bitwise Chief Investment Officer Matt Hougan says that does not tell the full story.
Hougan sees Bitcoin correlating with gold only in specific regimes, while it behaves as an entirely different asset the rest of the time.
What Hougan Said About Bitcoin’s Shifting Role?
Hougan told the Forward Guidance podcast on Wednesday that Bitcoin does not move for just one reason at a time even as most investors make the mistake of viewing it through a single lens at all times.
From October to June, he argued, the dominant driver was the crypto deleveraging cycle rather than macro forces.
What changed recently is that Treasury Secretary Scott Bessent’s interventions in the bond market pushed the macro factor back to the forefront, overwhelming everything else.
The result is Bitcoin’s correlation with gold hitting its highest level in years, mirroring what happened during the COVID stimulus package when macro forces similarly dominated all other drivers.
“When you need it to act as a deep debasement hedge, Bitcoin in fact does that,” Hougan said. “It is in fact digital gold, but it’s not exactly gold,” he added.
Why the 60/40 Portfolio Is Broken?
Hougan and Proficio founder Bob Haber argued on the podcast that the traditional 60/40 portfolio allocates 100% of its assets to fiat-denominated investments, leaving investors without a hedge against currency debasement.
The 60/40 framework emerged during a 40-year period when interest rates fell from 18% to 0%, benefiting from a unique regime that no longer exists.
Haber noted that gold has delivered returns competitive with equities over the past 50 years while remaining uncorrelated to stocks, something bonds cannot claim.
Both argued that a meaningful allocation to debasement assets like gold and Bitcoin is not speculative but a logical response to accelerating fiscal imbalances.
Moreover, Hougan said institutional investors have increased their Bitcoin allocations from 1% to 2% and then 5%, while some wealth managers now allocate as much as 10% after largely dismissing the risk of Bitcoin falling to zero.
What Both See Ahead for the Fed?
Both Hougan and Haber said in the podcast that the Fed is no longer the dominant market force it once was.
Haber put a modest probability on one rate hike before year end but called it a buying opportunity for debasement assets if it happens.
Hougan agreed, arguing that fiscal policy now drives the environment and Treasury decisions matter far more than the Fed’s moves within the 3.25% to 4% rate range.
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