Bitcoin’s Volatility Is Dying (And That’s Bullish)

Nik Bhatia (0:00)

The Bitcoin Gold Ratio charging back above 20, while global bonds remain in meltdown formation. A massive global macro update for everyone today with over 100 charts. Let's get right into it.

Welcome back to The Bitcoin Layer. I'm Nik Bhatia. We'll start with our first chart, Bitcoin vs. Gold relative to Bitcoin vs. the dollar. The Bitcoin Gold Ratio in green, while the Bitcoin price in dollar terms in orange. And what you can see is that for Bitcoin's entire life, these two ratios have mimicked each other, meaning that Bitcoin vs. the dollar behaves in a similar way to Bitcoin vs. gold. That is an underlying thesis that we have built upon over the last couple of years. And now Bitcoin vs. gold, almost the first chart I check every day, still Bitcoin vs. the dollar, but I feel Bitcoin vs. gold, something that has entered my analysis on a permanent basis. And I love to see Bitcoin charge back above 20 There is a little bit of resistance in this 20 to 22 area. You can see a little consolidation area at the end of 2025 So we'll see if Bitcoin faces some resistance here. But Bitcoin holding 80,000, holding the level of 20 vs. gold, some underlying bullishness in the Bitcoin markets, but very close to support levels on the Bitcoin price. Remember, 82,700, a key level that once we broke Bitcoin, extended that rally, now has come back to test it a couple of times overnight. We'll see if that level can hold. Currently Bitcoin trading at about 84,000. We're recording here on Tuesday, September 29th, around 930 Pacific. And of course, the block height here, 969,180.

Bitcoin trading $83,200.

Back to our charts. This is the same two metrics here, but now shown on a logarithmic scale. To get a better sense of what happened in the early years of Bitcoin's life. And you can see the fit is much, you can see the fit much more clearly on this logarithmic chart. This again, emphasizes the point that Bitcoin is not just trading relative to the dollar in terms of people's portfolio decisions, but also relative to gold. Why? We go back to the Layered Money thesis, Bitcoin and gold, the only two non-liability, counter-party-free commodity money assets on the planet. And for thousands of years, gold was essentially into a lesser extent silver, the only commodity to serve such a function. Layered Money means that money follows a hierarchy, and most money historically has been some promise to pay gold or silver. And so showing Bitcoin and gold on that first layer of money without a counter-party, and all derivatives such as gold shares, historically currency that promise to pay gold, or today, a share in iBit, a Bitcoin ETF, simply a claim on a monetary commodity. This is why we continue to compare Bitcoin and gold. Bitcoin only has one historical comparison, and that's what I largely wrote about in both of my books, Layered Money and Bitcoin Age. Speaking of gold, a trailing five-year performance relative between these assets, and you can see gold in the lead, trailing five years up about 137%.

Bitcoin in second place up about 103%, so approximately doubling over a five-year time horizon. The S&P 500 would have turned $100 into $176.

Meanwhile, US. Treasuries had over 27% of their value destroyed over the last five years.

This destruction in long-term savings is exactly the underlying thesis to Bitcoin today. It is an overextension of credit in the sovereign world, as well as an overcommitment to future liabilities relative to the current tax base. Now, I am a firm believer that the United States will not default on any of its interest payments, principal payments, Medicare payments or Social Security payments. That means the money must be created from somewhere, whether it is the government through accounting mechanisms, the Federal Reserve by expanding its balance sheet to absorb government debt, or what I believe will happen over the next few years, a massive extension of credit from the banking system to the sovereign done by the purchase of Treasury bills. And these banks are essentially able to print money on behalf of the government because they're printing money that the government then spends into the economy. And those recipients of those funds are those banks' customers. So essentially, the bank can add T-bills to its asset side and add deposit liabilities to the contractors and the individuals receiving government payments. In this way, the Fed might be able to avoid QE, but global banking assets will still rise because they will rise at the commercial banking level. This is a big thesis of mine within the United States and a concept that we have been covering from a balance sheet perspective for a couple years. We did several episodes this summer on the cold card incident, and a lot of you have been rethinking your setup ever since. My takeaway is that self-custody works, and it's best when no single device or vendor carries all the weight. CASA, today's sponsor, secures your Bitcoin with five keys instead of one, and it's held on hardware from different manufacturers, plus your phone, and CASA holds one key for recovery. No single vendor can touch your funds, and neither can CASA, because moving funds takes three keys, and CASA only has one. Their most popular offering, CASA Premium, they ship an onboarding kit right to your house with the hardware devices, the Faraday bags, and everything else that you will need. They pair you with an advisor who will walk you through the setup on a call, and the security advisory team is available for you for as long as you are a member. Check out CASA at casa.io, and use code TBL for 10% off of your subscription. Health care is one of the biggest expenses of your life, so why don't more people treat their health financial plan as its own line item? Sound HSA lets you hold real Bitcoin inside a triple tax-advantaged health savings account. This is not an ETF, not a stock. This is real Bitcoin secured in multi-sig cold storage. It's long-term health savings built for long-term health needs. Use code TBL to waive the setup fee, transfer an existing HSA, or open an account with new funds at soundhsa.com.