Disclosure: the author, Steve Neamtz, is chief executive of Yorkville America. Bloomberg has reported that he oversees the firm’s ETF business and that Yorkville intends to add more digital-asset products and pursue acquisitions. His conclusion, that solutions helping investors size gold and bitcoin allocations add value, describes the category his firm operates in.
- Neamtz argues gold and bitcoin are not competitors but the same trade at different stages, united by supply that cannot be expanded by central banks or fiscal policymakers. US federal debt has passed $39 trillion with roughly $1 trillion a year spent servicing it, and the dollar has lost about 40% of its purchasing power over two decades.
- He concedes the evidence against the conventional case. A 2025 study in Resources Policy, testing six asset classes, found neither gold nor bitcoin can be classified as a hedge or safe haven for financial markets. His response is that this measures drawdown behaviour, while buyers are making a debasement bet rather than seeking a shock absorber.
- The infrastructure argument is the substantive one. Gold already has the custody, legal and reserve-eligibility plumbing that lets central banks act on the thesis, and they bought a record 289 metric tons in the second quarter after 244 in the first. Bitcoin is being bought into the same thesis through spot ETFs, which solve custody but not the sovereign reserve status central banks require.
- Neither asset has behaved as advertised during the current crisis. Gold has fallen more than 20% since the Iran war began in late February, and bitcoin is quoted at $80,983 against a peak near $126,000.
What Happened?
Neamtz notes gold’s 5,000-year record against bitcoin’s 17 years, and credits gold’s lead to decades of built plumbing rather than a stronger claim to the thesis. He flags that the central bank purchase data comes from an industry body funded by mining interests, while noting the pace is independently corroborated. His closing question is not which asset wins but how much of each belongs in a portfolio built for eroding purchasing power, given their very different volatility.
Why It Matters?
The distinction he draws is legitimate and most allocators conflate the two things. A hedge moves against your portfolio when markets fall; a debasement asset holds value against a depreciating currency over long periods. Those are different jobs and an asset can do one without the other. Where the column stops short is in drawing the consequence: if gold and bitcoin do not hedge drawdowns, then they do not provide the crisis protection many investors believe they are buying, and sizing them as portfolio insurance is a mistake regardless of the debasement case. The current episode demonstrates it. A war disrupted energy supplies, triggered global inflation and prompted monetary tightening, and gold fell more than 20% while bitcoin dropped roughly a third from its peak. Both failed as crisis hedges in an actual crisis, because rising real rates impose an opportunity cost on assets that yield nothing, and that cost overwhelmed the haven bid. The debasement arithmetic is nonetheless real and worth taking seriously. Thirty-nine trillion dollars of federal debt with a trillion a year in interest is a genuine fiscal problem, and it is the same problem showing up in the Treasury weighing cancellation of its 20-year bond because the long end will not absorb supply, and in France issuing shorter because dealers report weak demand. Central banks buying gold at record quarterly rates is the clearest evidence that reserve managers act on this view. The honest framing for a portfolio is that these are long-horizon positions against currency debasement that will not help in a drawdown and may deepen one, which is a defensible allocation at a size that assumes no protection.
What Next?
Central bank gold purchases are the series that validates or undermines the reserve diversification thesis, and the quarterly pace has been rising. For bitcoin, the infrastructure gap Neamtz identifies is the thing to watch: spot ETFs solved custody, and sovereign reserve eligibility is the step that has not happened. Real rates remain the dominant variable for both, with a Federal Reserve increase in play for December after September inflation ran at 3.7%. Separately, the reported theft of up to $93.2 million from more than 300 wallets through compromised hardware devices is a reminder that custody risk in crypto is operational as well as regulatory.
Affected Tickers and Coins: BTC, GC, GLD, IAU, COIN
Source: CoinDesk
