Bessent's Buyback Plan Sent a Record $7 Billion Into Gold and Bitcoin
Per Bloomberg, Isabelle Lee reports that ETFs tracking gold and bitcoin pulled in a record $7 billion over five trading days. SPDR Gold Shares took nearly $3.4 billion and BlackRock's iShares Bitcoin Trust took $1.5 billion, putting both inside the top 10 US ETFs by weekly inflows, with GLD trailing only a handful of funds including the Vanguard S&P 500 ETF.
The catalyst was fiscal. Bessent's plan to at least double long-dated Treasury buybacks pushed yields and the dollar lower, and gold and bitcoin moved up together. Bernstein's Gautam Chhugani framed the backdrop: the 40-year era of declining interest rates appears to have ended, which exposes governments to rising debt-servicing costs at a moment when sovereign debt sits at unprecedented levels. That is the same arithmetic Reuters laid out this week, where the deficit runs near 6% of GDP and interest costs have doubled to roughly 3%.
What makes this week different is that the two trades stopped competing. Through much of the past year gold strengthened on haven demand while bitcoin failed to make the same case, and the two were treated as substitutes. Eric Balchunas of Bloomberg Intelligence read the reunion as a return to first principles, calling bitcoin a debasement-resistant asset and saying this is what it was born to do. Noelle Acheson pointed at the derivative rather than the level, noting demand is not just positive but accelerating, which she reads as a scramble to correct underweight positions.
The year-to-date numbers put the week in proportion. GLD manages about $155 billion and is still running $2.8 billion of net outflows for the year despite an 8% return. IBIT manages about $60 billion with roughly $830 million of inflows, against a bitcoin price that remains down on the year. Five days of record buying does not undo either. Gold is up about 13% this month and above $4,600 an ounce, and bitcoin has moved above $80,000, so the flows are chasing performance that has already happened.
Allocation advice has moved in the same direction. Ray Dalio has told investors to reduce bond holdings and put as much as 15% into gold with a smaller bitcoin position, framing it as a hedge against a US debt crisis rather than a directional bet.
What to watch is whether the correlation holds once the buyback story fades. The two assets have converged before and separated again, and a single week of flows into the largest, most liquid wrappers is a sentiment reading rather than a structural one. The condition underneath it, borrowing costs above growth with no policy fix on offer, is the part that has not changed.