Bitcoin 'Debasement Trade' Gains Steam Again as Institutions Pile In

Bitwise Head of Research Ryan Rasmussen says institutional investors are increasingly treating Bitcoin (CRYPTO: BTC) as a hard asset alongside gold—and benefiting from its upside over the past years. Why Sovereign Fund Buying Matters In an interview with Bitcoin Magazine Tuesday, Rasmussen said Bitwise spoke with several sovereign wealth funds as part of its institutional crypto adoption research and found interest in Bitcoin across multiple regions. One particularly notable finding was that a sovereign wealth fund was selling gold and other FX reserves to fund Bitcoin purchases. Rasmussen said even relatively small Bitcoin allocations of two to three percent could translate into significant buying because sovereign wealth funds control enormous pools of capital. The institutions are also taking different routes into Bitcoin. Some are considering spot Bitcoin ETFs, while others are exploring direct custody, mining and options strategies designed to generate income from their holdings. Bitcoin Bottom Saw Buying, Not Selling Bitwise’s research also suggested institutional investors remained resilient during Bitcoin’s bear market. The firm interviewed 15 major institutions, including pensions, endowments, foundations and sovereign wealth funds. Rasmussen said none sold crypto as Bitcoin dropped from roughly $125,000 to $60,000 in June 2026, while several bought more during the decline. Many of these investors view Bitcoin and gold as complementary hedges against currency debasement rather than competing assets. Rasmussen said allocation recommendations from major wealth-management platforms have also expanded from roughly one percent several years ago to around two to eight percent today, helping move Bitcoin closer to becoming a standard component of institutional portfolios. Bitcoin’s ‘Debasement Trade’ Case Grows Rasmussen believes Bitcoin’s latest bear market bottomed near $60,000, pointing to the market’s increasingly muted reaction to negative developments as a sign that selling pressure had been exhausted. He also argued that Bitcoin ETFs and digital-asset treasury companies have fundamentally changed market dynamics by introducing systematic, long-term demand that wasn’t present during previous cycles. The prior week’s $2.5 billion in spot BTC ETF net inflows signaled strong institutional demand, even as Bitcoin remained well below its previous all-time high. While Bitcoin is likely to trade sideways around the U.S. midterms, Rasmussen said Bitwise expects prices to ultimately move higher, adding that the broader debasement trade is "just getting started." Image: Shutterstock Read Also: Bitcoin's Fair Value Is $197,000, Bitwise Exec Says: Can BTC Close the Gap?