Bitwise head of research Andre Dragosch says the correlation between Bitcoin (CRYPTO: BTC) and gold has hit a six-year high as institutions stop treating them as separate trades.

Why Institutions Are Buying Both at Once

Dragosch said on the Bitcoin for Millennials podcast on Monday that the Bitcoin-gold correlation reaching its highest level since the COVID stimulus era signals a fundamental shift in how large investors allocate capital.

They are no longer choosing between gold and Bitcoin as separate debasement hedges but buying both simultaneously. 

ETP flows into Bitcoin-related products have actually exceeded gold ETF flows, which Dragosch called remarkable given gold’s decades-long head start as an institutional asset.

He argued the AI trade sucked oxygen away from Bitcoin for most of 2026, with capital flowing into semiconductors and hyperscalers instead of hard assets. 

That trade now appears to be exhausting itself, with semiconductor stocks peaking around June and Bitcoin rallying nearly 30% since then, producing a genuine decoupling from tech.

Why the Four-Year Cycle Is Becoming Less Relevant

Dragosch argued that institutional demand through ETFs and treasury company accumulation now dwarfs the halving supply deficit by a multiple, making the four-year cycle a secondary driver of price rather than the primary one. 

Most market participants expected a cycle low near $40,000 around October, but Bitcoin likely bottomed in June, with the odds of revisiting those lows below 10% in his view.

He pointed to two conditions that historically mark cycle transitions:

  • A spike in volatility: Bitcoin went from record low trading volumes to a sudden surge in engagement
  • A surge in supply in profit: the value of coins in profit jumped roughly $300 billion in a matter of days in late August, triggering the self-reinforcing feedback loop that marks early bull markets

Why the Dollar Downtrend Is the Bigger Story

Dragosch added that Bitcoin has never experienced a secular dollar downtrend since its 2009 launch, and one may now be starting as the AI bubble consolidates and capital flows out of US equity markets.

Dollar depreciation is historically synonymous with global money supply expansion, and in that environment hard assets including Bitcoin tend to significantly outperform. 

He compared the setup to the early 2000s commodity super cycle that followed the dot-com crash, when capital rotated out of US equities into gold and commodities for nearly a decade.

His base case: AI consolidation triggers dollar weakness, commodities rally, and Bitcoin outperforms everything in the next cycle.

Image: Shutterstock