Bitcoin is trading like gold again, but the Fed is still setting the ceiling

Bitcoin's recent price action increasingly resembles gold as investors respond to renewed concerns over US fiscal sustainability, CoinShares said in its latest market update .The crypto asset rose from above $60,000 to the upper-$70,000s, briefly touching $82,000 after Fed Governor Christopher Waller delivered more dovish comments on monetary policy.However, CoinShares said the ongoing US-Iran war and monetary policy could cap the rally. Kevin Warsh's recent remarks at Jackson Hole were seen as hawkish and prompted markets to price roughly a 66% chance of a September rate hike.Still, Waller later countered that recent inflation data showed encouraging disinflation and said he would favor holding rates steady if the August data confirms the improvement.According to CoinShares, the market's rate-hike expectations appear too aggressive in light of labor market data and growing disagreement among Fed officials over whether inflation or employment should carry more weight.The shifting outlook has also influenced crypto investment flows. About $100 million flowed out of digital asset products following Warsh's comments, while inflows have since returned to roughly $1 billion this week, after $2 billion last week and $2.9 billion the week before.Oil and Iran represent another major variable. CoinShares expects a potential resolution to the conflict, as political pressure builds ahead of the US midterms. But if Chinese oil demand returns to normal while supplies remain disrupted, oil prices could rise sharply again, pushing inflation higher and strengthening expectations for tighter monetary policy, which would be a near-term negative for Bitcoin.The US bond market is the other major catalyst. The 10-year Treasury yield remains around 4.7%, reflecting investor concerns over US debt at approximately 122% of GDP and the volume of government debt still to be issued. Treasury efforts to reduce long-term yields have so far had limited impact.A full-blown Treasury confidence crisis remains a tail risk, but such a scenario could strongly benefit Bitcoin and gold as investors seek stores of value outside government securities. Blockchain stocks are also attracting capital, with roughly $27 million of inflows this week and more than $100 million over the past month, pointing to a rotation within the digital asset sector toward infrastructure and tokenization businesses.CoinShares expects Bitcoin to remain within its current range unless either Iran is resolved in a way that reduces inflation and rate expectations or confidence in US Treasuries deteriorates further. Until one occurs, Bitcoin is likely to remain range-bound, with August inflation and the September Fed meeting as the two key dates, the firm stated.