The post If the debasement trade would catapult Bitcoin, why is the market down? appeared on BitcoinEthereumNews.com. Bitcoin traded at $117,729.81 as of press time, struggling to extend gains from its $126,000 all-time high as short-term positioning dynamics and risk-off flows dominated the medium-term debasement thesis. The debasement trade thesis gained popularity after JPMorgan published a report on the topic on Oct. 1. The thesis is based on the expectation that fiscal expansion and currency devaluation will drive demand for hard assets. Consequently, assets that hold buying power, such as gold and Bitcoin, would favor under these conditions. Amid this backdrop, gold reached a new all-time high of $4,059.38 on Oct. 10. But if gold is benefiting from the debasement trade, why is Bitcoin down by 4.2% on the week? Short-term pressure The US dollar is up by 1.3% on the week as of press time, approaching what could be its best weekly close since mid-November 2024. The movement began after Japanese government bonds reached their highest yield in 17 years, which strengthened the US dollar. Traders began de-risking mid-week when chatter about a stock bubble surfaced in the markets, fueled by stocks trading near their all-time highs. On Oct. 10, President Donald Trump threatened tariffs against China as a response to its control over rare-earth elements, which power the supply chain of tech hardware. Reflections on market structure The macroeconomic developments affected one of Bitcoin’s major supports for price action, namely the demand from exchange-traded funds (ETFs). Despite pulling over $1.2 billion on Oct. 6, the second-largest daily inflows on record, Bitcoin ETF flows subsided to $875.6 million the following day. Data from Farside Investors shows that the flows became even thinner on Oct. 8, totaling $440.7 million. On Oct. 9, the Bitcoin ETFs registered nearly $198 million in inflows, the smallest amount during their spree of nine positive days. On Oct. 10, the Trump threat… The post If the debasement trade would catapult Bitcoin, why is the market down? appeared on BitcoinEthereumNews.com. Bitcoin traded at $117,729.81 as of press time, struggling to extend gains from its $126,000 all-time high as short-term positioning dynamics and risk-off flows dominated the medium-term debasement thesis. The debasement trade thesis gained popularity after JPMorgan published a report on the topic on Oct. 1. The thesis is based on the expectation that fiscal expansion and currency devaluation will drive demand for hard assets. Consequently, assets that hold buying power, such as gold and Bitcoin, would favor under these conditions. Amid this backdrop, gold reached a new all-time high of $4,059.38 on Oct. 10. But if gold is benefiting from the debasement trade, why is Bitcoin down by 4.2% on the week? Short-term pressure The US dollar is up by 1.3% on the week as of press time, approaching what could be its best weekly close since mid-November 2024. The movement began after Japanese government bonds reached their highest yield in 17 years, which strengthened the US dollar. Traders began de-risking mid-week when chatter about a stock bubble surfaced in the markets, fueled by stocks trading near their all-time highs. On Oct. 10, President Donald Trump threatened tariffs against China as a response to its control over rare-earth elements, which power the supply chain of tech hardware. Reflections on market structure The macroeconomic developments affected one of Bitcoin’s major supports for price action, namely the demand from exchange-traded funds (ETFs). Despite pulling over $1.2 billion on Oct. 6, the second-largest daily inflows on record, Bitcoin ETF flows subsided to $875.6 million the following day. Data from Farside Investors shows that the flows became even thinner on Oct. 8, totaling $440.7 million. On Oct. 9, the Bitcoin ETFs registered nearly $198 million in inflows, the smallest amount during their spree of nine positive days. On Oct. 10, the Trump threat…