August’s market action offered a reminder that narratives in crypto can shift fast. Bitcoin slipped about 6.5% after briefly testing a new all-time high near $125,000, while ether extended a strong run, rising nearly 19% and nudging its market share to roughly 13%. The rotation showed up in flows: bitcoin ETFs recorded rare net outflows as some investors took profits, while ether ETFs drew heavy inflows that pushed assets under management to fresh highs.
What the data is showing
Trading activity stayed elevated through the month. Spot volumes remained above their 12-month average and derivatives markets were busy: open interest in bitcoin and ether options hit new highs, and August saw a record $145 billion in BTC option trading volume. Implied volatility was relatively muted for much of the month but rose toward the end, suggesting option markets may be underestimating near-term risk.
The gold comparison
Meanwhile, gold surged to successive record highs amid falling rate expectations, persistent core inflation, a softer dollar and heightened geopolitical and political risk. Notably, market reaction to reported changes at the Fed pushed investors toward traditional safe havens — even as bitcoin traded lower on the same headlines.
That contrast raises an enduring question: should bitcoin be thought of as digital gold? Short-term correlations between bitcoin and gold have historically been low and inconsistent, but a meaningful change shows up on longer horizons. The 180-day rolling correlation has risen materially since 2024 — averaging near 60% recently — implying investors are increasingly treating the two assets similarly over multi-month windows.
There are reasons to take that shift seriously. Bitcoin’s limited programmability, deliberate policy on issuance and strong narrative around scarcity make it a different kind of crypto asset — one whose long-term value case more closely resembles gold than smart-contract platforms. At the same time, gold itself is an imperfect inflation hedge and doesn’t move predictably month-to-month.
For investors, the takeaway is practical: watch ETF flows, multi-month correlations and macro signals (rates, dollar strength, geopolitical risk). These indicators matter more for the “digital gold” story than daily price noise. Risk reminder: crypto markets remain volatile; rising correlation does not guarantee future behavior and this analysis is not financial advice.
Source: CoinDesk. Read the original coverage for full details.