Fiscal Dominance Is Breaking The 60/40 Portfolio | Matt Hougan & Bob Haber

The "debasement trade" centers on protecting portfolios from the accelerating degradation of the U.S. dollar, driven by unsustainable fiscal deficits and government spending. Traditional 60-40 portfolios, being entirely fiat-denominated, lack essential hedges against this systemic erosion of purchasing power. Integrating hard assets like gold and Bitcoin—which functions as "digital gold"—is increasingly necessary for effective diversification. Bitcoin’s correlation with gold strengthens during periods of heavy fiscal intervention, confirming its utility as a hedge against monetary instability. Furthermore, gold miners provide significant operating leverage and potential outperformance compared to physical bullion. As the U.S. Treasury faces the challenge of financing trillions in annual debt, the shift toward fiscal dominance over monetary policy makes these non-sovereign assets critical for long-term capital preservation. Matt Hougan of Bitwise and Bob Haber of Proficio argue that failing to hedge against this debasement leaves investors exposed to significant currency risk.