‘Debasement trade still on,’ says hedge fund exec as Bitcoin lags gold

Select metals deemed ‘safe havens’ such as gold, silver and platinum continue to record triple-digit gains while Bitcoin struggles to catch up. This week, gold soared nearly to $5k, bringing its year-on-year (YoY) gains to close to 80%. 

Silver, on the other hand, exploded by 200% while platinum posted 175% gains. Bitcoin, on the other hand, was trading at $89k at press time – Down 12% over the same period.

For hedge fund manager James Lavish, these explosive runs mean the “debasement trade” is still on and BTC could catch up soon. 

“The debasement trade is not just on; it is ripping people’s faces off. And so, the next question is not ‘if’, but ‘when’ does Bitcoin resume higher?”

Source: James Lavish/Bloomberg

Will BTC catch up to gold?

Jerome Powell’s term as Fed chair will end in May 2026. His replacement will not only test the Fed’s independence, but also prompt markets to react to the entire process. For analysts like Fundstrat’s Tom Lee, gold will likely extend its rally in such uncertainty. 

However, BTC’s pathway is unclear, according to some analysts. In fact, some even doubt its inclusion in the “debasement trade” after lagging behind the perceived “safe havens.”

Lavish quipped, 

“Bitcoin is still only second to Silver in the debasement trade in the last 5 years.”

Source: James Lavish/Bloomberg 

This begs the question – What’s really slowing BTC’s momentum and blocking it from catching up to gold, silver, and platinum? 

What’s slowing down BTC?

Institutional flows have tapered significantly for BTC, while gold’s demand has soared massively since late 2025.

The 30-day ETF flows showed gold has attracted $10 billion since December 2025. Over the same period, BTC only reversed the negative inflows seen in Q4 2025. In fact, it is yet to fully flip to positive. 

Source: BOLD Report 

In other words, there is now greater demand for gold than for BTC. 

The quantum risk may be another factor derailing the ‘digital gold.’ Recently, Bloomberg reported that Jeffries’ Head of Equity Strategy, Christopher Wood, liquidated its 10% BTC allocation and rotated to gold. Wood cited the increasing risk that quantum advancement could break BTC. 

Similar fears have been expressed by Capriole Investment’s Charles Edwards. He recently cited the decoupling of BTC from the global liquidity surge, noting that quantum risk may be behind its underperformance. 

Source: Capriole/Fidelity

Final Thoughts

• Hedge fund manager James Lavish believes BTC will catch up to gold as the “debasement trade” is still on.
• Muted inflows and quantum fears may have contributed to BTC’s underperformance.