GLD, IBIT and Other ETFs to Play Debasement Trade

Debasement trade is gaining traction on Wall Street as concerns over the size and cost of the U.S. budget deficit intensify.The U.S. federal fiscal deficit-to-GDP ratio stands at approximately 5.8% to 6.1% based on recent economic tracking for mid-2026.

Investors should note that the “debasement trade” refers to buying assets that may hold or increase their value when investors worry that fiat currencies will lose purchasing power. The trade centers on the idea that hard assets, including gold, cryptocurrencies and other stores of value, can benefit as investors seek protection against a weaker dollar and growing Treasury debt.

Those concerns intensified last week following the Treasury Department’s decision to double the maximum size of its bond buyback operation to at least $4 billion from $2 billion. While the size of the purchases remains small relative to the overall Treasury market, the move sent a strong signal to investors, per Stephen Coltman, head of macro at 21Shares, as quoted on CNBC.

U.S. Dollar Slumps on Treasury Buyback Plans

The U.S. dollar fell to a three-month low against the euro on Aug. 21, 2026, due to the announcement. Invesco DB US Dollar Index Bullish Fund UUP is off 2.2% over the past month (read: Dollar at 3-Month Lows on Treasury Buyback Plans: ETF Strategies to Play).

Treasury officials have also indicated that the department could use its General Account to help finance the purchases. The move came as the July U.S. budget deficit hit a five-year high as federal debt topped $40 trillion, while the 30-year Treasury yield approached a two-decade peak.

Other Factors Playing Against Dollar Strength

BRICS economies have been taking an important step toward de-dollarization. The greenback’s share in global reserves has declined lately.

The U.S. dollar makes up roughly 56% of global foreign exchange reserves, according to data from the International Monetary Fund. The dollar's share has fallen from about 70% at the beginning of 1999.In 2025, gold surpassed U.S. Treasuries as a share of official reserves.

ETFs to Play

Against this backdrop, below we highlight a few ETFs that can be played as part of a debasement trade. 

SPDR Gold Shares GLD

Gold — a safe-haven asset — has emerged as a major beneficiary of the renewed debasement narrative. The precious metal touched a three-month high Monday after rising more than 5% last week.

Gold has now advanced for five consecutive weeks and is on track for its strongest monthly gain since 1999, as quoted on CNBC. The precious metal is priced in the U.S. dollar, which makes it better-positioned in a falling dollar environment.

GLD boasts a massive asset base of $154.6 billion and trades at a daily average volume of 8.2 million. The fund charges 40 bps in fees. The fund has added about 13% over the past month.

iShares Bitcoin Trust ETF IBIT

The cryptocurrency Bitcoin has also benefited, with iShares Bitcoin Trust ETF (IBIT) gaining 8.3% over the past five days. Bitcoin surged more than 20% last week, marking its strongest three-day rally since 2023, as quoted on the above-mentioned CNBC article.

Investors may see Bitcoin as a higher-risk digital alternative to fiat currencies as the greenback has slumped. The $55.0-billion-asset fund IBIT charges 25 bps in fees. It trades at a volume of about 48 billion shares a day on average. The fund has added about 21% over the past month (read: Mark Cuban Does Not Have High Hopes for Bitcoin's Revival: Should You?).

Bitwise Proficio Currency Debasement ETF BPRO

The fund is a direct diversified play on the debasement trade, combining exposure to bitcoin, gold, silver and mining equities. The fund’s notable holdings are Amundi Physical Gold ETC (21.39% weight), WisdomTree Physical Gold (18.02%), iShares MSCI Global Gold Miners ETF (10.19%), SPDR Bloomberg 1-3 Month T-Bill ETF (8.62%) and WisdomTree Physical Silver (5.77%).

Making a debut in January 2026, the fund has amassed an asset base of about $110 million. The fund charges 96 bps in fees. However, it trades at a lower volume of about 7,000 shares a day on average. The fund has added about 17.8% over the past month.

iShares Silver Trust SLV

Silver also offers a good hedge. It performs well in a falling dollar environment. Silver’s industrial demand should benefit the fund even more. The $34.4-billion-asset fund SLV charges 50 bps in fees. It trades at a volume of about 18 billion shares a day on average. The fund has added about 15% over the past month.

VanEck Gold Miners ETF GDX

Gold-mining stocks often trade as leveraged plays of the underlying metal. The $32.0-billion-asset fund GDX charges 51 bps in fees. It trades at a volume of about 23 billion shares a day on average. The fund has added about 35.5% over the past month.

Invesco CurrencyShares Euro Trust FXE

The fund has an asset base of $361.0 million while it trades at an average volume of 140,000 shares. The fund charges 40 bps in fees and is up about 2.7% over the past month.

The euro is rising due to a softer U.S. dollar, and market anticipation that the European Central Bank may lift interest rates amid rising inflation. Markets price a roughly 25% chance of the ECB deposit rate reaching 3% by March 2027 and an about 60% chance by September, per Reuters.

The ECB enacted a 25bp increase in rates in June, the first rate hike in three years, per Trading Economics. The ECB is also expected to raise rates in September to counter the U.S.-Iran war-induced energy shock and a spike in inflation.

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This article originally published on Zacks Investment Research (zacks.com).

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