“Devaluation trades” became a core narrative in the global markets in 2025. Against the backdrop of widening fiscal deficits and increasing money supply, gold hit new highs, while Bitcoin experienced a significant decline by the end of the year, sparking market divergence. As we enter 2026, investors are reassessing a key question: can Bitcoin’s price still benefit from the long-term logic of currency devaluation?
The so-called “devaluation trade” essentially involves allocating scarce assets to hedge against the decline in fiat currency purchasing power. In 2025, this logic also applied to Bitcoin, as its supply cap is fixed and it has global liquidity. However, in Q4 2025, the crypto market experienced a sharp correction, with Bitcoin falling nearly 30% from its October high of about $126,080, weakening short-term confidence.
Overall, some analysts believe this does not signal the end of the trend. Bloomberg senior ETF analyst Eric Balchunas pointed out that the devaluation trade itself is a highly patient, long-term strategy, and short-term price fluctuations do not change its core logic. He believes that as government debt and liquidity continue to expand, related trades still have a solid foundation, though they are often disconnected from immediate news.
From a macro perspective, the risk of currency devaluation has not disappeared. Pepperstone research analyst Dilin Wu stated that the weakness of Bitcoin at the end of 2025 is more like a phased easing of inflation expectations rather than a fundamental reversal. She noted that since the US approved a spot Bitcoin ETF in 2024, increasing long-term capital has entered the market, gradually shifting Bitcoin from a high-volatility speculative asset to a structural hedge.
Additionally, policy environment remains a key focus. Several analysts expect that the Trump administration will push for more accommodative fiscal and monetary policies in 2026 to stabilize the economy ahead of midterm elections. Greg Magadini, head of derivatives at Amberdata, believes that if the Federal Reserve shifts to a dovish stance, improved liquidity will reignite the “devaluation trade,” and Bitcoin could become one of the main beneficiaries.
In summary, Bitcoin’s 2026 trajectory may no longer be driven solely by positive factors but will depend on the resonance of debt expansion, policy orientation, and institutional allocation. Under the premise that the long-term expectation of fiat currency devaluation remains intact, the narrative of Bitcoin as “digital gold” still has the foundation to regain momentum.
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