Bitcoin (BTC) is once again trading like gold as investors hedge against potential inflation, according to new analysis from digital asset management firm CoinShares. The framing positions Bitcoin alongside the traditional safe-haven asset during periods of monetary policy uncertainty, a correlation that has surfaced repeatedly since Bitcoin's maturation into a widely traded institutional asset.

James Butterfill, CoinShares' head of research, notes that dueling speeches from Federal Reserve chairman Kevin Warsh and Fed governor Christopher Waller left different impressions about the possibility of a September rate hike.

"Kevin Warsh's comments on Friday were read as hawkish, with a clear emphasis on inflation rather than the weakening employment picture, and markets moved towards pricing roughly a two-thirds probability of a September rate hike. Waller subsequently pushed back against that interpretation, arguing that recent inflation data show encouraging signs of disinflation and indicating that, provided August inflation confirms the trend, he would favour keeping rates unchanged in September. His comments helped ease Treasury yields and supported Bitcoin's move above US$80k. We think the market's pricing of a September hike still looks too aggressive, particularly given softer labour data and the divergence now emerging within the Fed over how much weight to place on inflation versus employment."

The CME FedWatch Tool, which generates probabilities using 30-day Fed Funds futures prices, currently estimates a 60.4% chance that the Fed will hike the federal funds target rate by 25 basis points at next week's Federal Open Market Committee (FOMC) meeting. Rate expectations matter for risk assets broadly because higher rates raise borrowing costs and tend to strengthen the dollar, pressures that have historically weighed on both Bitcoin and equities, while easing expectations have tended to support them.

Butterfill says two factors could drive Bitcoin higher amid the monetary policy uncertainty.

"For Bitcoin to move convincingly through US$80k, we think one of two things needs to happen: a resolution of the Iran conflict that lowers inflation and rate expectations, or a further deterioration in confidence in US sovereign debt that accelerates demand for non-sovereign stores of value. Until one arrives, range trading remains the more likely outcome.

Two dates carry most of the information from here. The August inflation print will tell us whether Waller's disinflation case holds, and the September meeting will show whether the Fed's internal split resolves towards inflation or employment. Everything else is noise around those two."

For readers tracking what comes next, the August Consumer Price Index release and the September FOMC decision are the two events CoinShares singles out as most likely to determine whether Bitcoin breaks its current range.

Bitcoin is trading at $79,337 at time of writing.