Key Takeaways
- • Bitcoin rose roughly 50% between early July and early October 2026, from about US$58,000 to about US$86,000, while US bond yields climbed toward their highest level since 2002, according to the Fat Tail Daily column.
- • US Bitcoin funds saw roughly US$4 billion in outflows in June 2026, their worst month since the funds launched in 2024, before Bitcoin reversed higher.
- • Bitcoin jumped 22% in a single week in late August 2026, after US government debt passed US$40 trillion and the US Treasury said it would double the size of its bond buybacks.
- • The column cites Bitwise data showing the Bitcoin-gold correlation reached its strongest level in almost six years in August before easing to about 0.4.
- • The author frames Bitcoin as a short-term risk asset and a long-term hedge against debasement, but the piece is opinion and also promotes a crypto advisory service and an upcoming offer.
Summary
According to the Fat Tail Daily column, Bitcoin defied the conventional view that rising bond yields pull money out of speculative assets. Bitcoin slumped below US$60,000 by the end of June 2026, less than half its October 2025 peak, after US Bitcoin funds recorded about US$4 billion in outflows that month. Between early July and early October, however, the asset climbed from around US$58,000 to around US$86,000 while US yields approached their highest level since 2002.
The column attributes the late-August rally to the US government debt passing US$40 trillion and the US Treasury's announcement that it would double the size of its bond buybacks to steady the bond market. Bitcoin rose 22% in a single week, and CNBC, as cited by the author, described the move as a return of the "debasement trade." Bloomberg also reported on the week, and the author notes that Ray Dalio had earlier advised investors to hold roughly 10% to 15% in gold plus "a bit of Bitcoin."
The column highlights the changing relationship between Bitcoin and gold. According to Bitwise, the correlation between the two assets reached its strongest level in almost six years by August 2026, after moving in opposite directions in early 2026. The score has since eased to about 0.4, which the author characterizes as a "fling" rather than a lasting link.
The author argues Bitcoin behaves as a short-term risk asset that responds to interest rates and liquidity, while over longer horizons it functions as a hedge against currency debasement, citing the fixed 21 million supply cap. The piece also acknowledges that Bitcoin fell back to around US$83,000 in the most recent week and remains highly speculative. Note that this is opinion content and includes promotional material for the author's crypto advisory service.
The column attributes the late-August rally to the US government debt passing US$40 trillion and the US Treasury's announcement that it would double the size of its bond buybacks to steady the bond market. Bitcoin rose 22% in a single week, and CNBC, as cited by the author, described the move as a return of the "debasement trade." Bloomberg also reported on the week, and the author notes that Ray Dalio had earlier advised investors to hold roughly 10% to 15% in gold plus "a bit of Bitcoin."
The column highlights the changing relationship between Bitcoin and gold. According to Bitwise, the correlation between the two assets reached its strongest level in almost six years by August 2026, after moving in opposite directions in early 2026. The score has since eased to about 0.4, which the author characterizes as a "fling" rather than a lasting link.
The author argues Bitcoin behaves as a short-term risk asset that responds to interest rates and liquidity, while over longer horizons it functions as a hedge against currency debasement, citing the fixed 21 million supply cap. The piece also acknowledges that Bitcoin fell back to around US$83,000 in the most recent week and remains highly speculative. Note that this is opinion content and includes promotional material for the author's crypto advisory service.
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