Gold’s Running Hot—Why it Matters for Bitcoin and Crypto

November 10, 2025

The U.S. federal debt has now surpassed $38 trillion, raising serious questions about how the government will continue to finance its obligations. Traditional buyers including foreign sovereigns and large domestic institutions are showing signs of slowing purchases. At the same time, investors are signaling concern through their asset allocations. Gold has surged ~55% in 2025, and Bitcoin continues to gain traction as a “digital gold” hedge against dollar and sovereign risk. Meanwhile, stablecoins are quietly absorbing more short-term Treasury issuance.

Key Points

1. Gold’s massive gains this year reflect rising skepticism among investors about U.S. debt sustainability and the dollar’s long-term status as a safe-haven.

2. Bitcoin benefits from the same “digital gold” thesis as gold, offering a fixed supply, digital alternative for investors concerned about U.S. debt and currency risk.

3. Stablecoins are quietly growing as marginal buyers of Treasuries, with 2025 estimated holdings of ~$195 billion, projected to reach ~$845 billion by 2030.

   
   

Who Holds What?

U.S. federal debt continues to climb, but the composition of holders is shifting. Foreign sovereigns, including China, are reducing allocations, while others diversify. Domestic buyers, from pension funds to mutual funds, face rising interest costs and competing obligations. The result: the Treasury is increasingly reliant on marginal buyers, especially in the short-term T-bill market.

Gold's Running Hot — A Clear Signal

Gold has been the standout performer in 2025, up ~55% year-to-date. These gains are more than a hedge against inflation. They are a clear vote of no confidence in the U.S. debt trajectory. As Treasury issuance rises and safe-haven demand increases, gold reflects the market’s perception that traditional U.S. debt financing may face stress.

Bitcoin as Digital Gold

Bitcoin, often referred to as “digital gold,” is gaining attention under the same framework that has driven gold’s performance. As investor confidence in the dollar and U.S. debt is tested, Bitcoin offers a decentralized, fixed supply, digital alternative. Institutional adoption and its correlation with macro risk indicators suggest that Bitcoin could benefit from the same store-of-value thesis and debasement trade that has powered gold this year.

Marginal Buyer of Treasuries

Stablecoins have become a cornerstone of the crypto ecosystem, facilitating liquidity, trading, and cross-chain capital flows. Today, approximately 70% of all stablecoins supply resides on Ethereum, underscoring the network’s dominant role as the primary hub for digital dollars. This concentration highlights not only Ethereum’s utility and network effects but also its potential as an investment opportunity. With stablecoins driving significant on-chain activity—from DeFi lending and yield generation to trading and payments—Ethereum benefits from sustained transaction demand, fee revenue, and developer engagement, making it a compelling platform for long-term exposure in the evolving crypto landscape.

Implications for Investors

• Track gold flows as an early indicator of market concern over sovereign debt.

• Consider Bitcoin under the “digital gold” thesis, particularly as a hedge against dollar and debt risk.

• Monitor stablecoins Treasury holdings, which are emerging as a new marginal source of demand; consider Ethereum, the protocol has ~70% of all stablecoins supply.

• Follow U.S. Treasury issuance trends to gauge financing stability.

"If you were neutral on everything and optimizing your portfolio for the best return‑to‑risk ratio, you would have about 15% of your money in gold or bitcoin.” – Ray Dalio

The U.S. debt has passed the tipping point. Investors are expressing severe skepticism via gold, stablecoins are quietly absorbing Treasuries, and Bitcoin sits poised as a digital alternative to gold. What steps are you taking to hedge against debasement?