Caitlin Long, CEO of Custodia Bank, says bitcoin’s recent price action suggests it may be returning to its roots as a hedge.
In a roundtable discussion with TheStreet’s Rob Nelson, Long noted that for the first time in a long time, bitcoin is trading more like gold than a tech stock.
“Over the last two days, bitcoin has been more correlated to gold than to the Nasdaq,” she said. “Historically, that hasn’t been the case until the last two days. Bitcoin is trading like a high-volatility stock on the Nasdaq, while gold has quietly risen and outperformed bitcoin so far this year.”
The shift comes amid broader market volatility. Stocks have fallen sharply while bond markets have risen — a decoupling that Long says hasn’t been seen since the coronavirus-era market turmoil.
She blames deliberate actions by sectors of the U.S. economy. “That’s what the Treasury wants. They’re not focusing on the stock market, they’re focusing on lowering interest rates… to fix the banking system, create more refinancing opportunities in the mortgage market, and help the U.S. government build a defense to refinance the Treasury.”
Long, who has long warned of systemic fragility in traditional finance, said the current move was risky but not catastrophic. “Are they doing it risky? Yes… but we’re not at the point where we’re going to blow it all up just because we had a 5% one-day correction.”
She also noted that Bitcoin’s four-year halving cycle is still valid. “It’s a fundamental cycle that’s tied to miner profitability. You can see that when the price goes down, the hash rate goes out of the market.”
Bitcoin halvings are regular events that occur about every four years, when the reward miners receive for adding new blocks to the blockchain is reduced by 50%. The process reduces the rate at which bitcoins are generated, making the asset more scarce over time. Halvings are seen as a key factor in bitcoin’s price and supply dynamics.
While she declined to make a direct price prediction, Long added that bitcoin’s behavior now reflects traders “seeking insurance” amid growing concerns about instability.
Custodia Bank is a digital asset bank based in Wyoming, founded by Caitlin Long. The bank is committed to bridging traditional finance and cryptocurrencies by providing compliant digital asset custody and payment solutions. The bank is known for promoting regulatory transparency in the crypto banking space.
