Why a Massive Selloff of Gold and Silver Is Dragging Bitcoin Down
Bitcoin has long been lumped together with precious metals as a hedge against a weakening dollar. That trade is unwinding in the face of an aggressive Fed, and bitcoin is falling along with the metals it was supposed to compete with.
Continued AI stock euphoria has drawn capital from across the market, from traditional metals—considered the safest assets—to cryptocurrencies—considered the riskiest.
Gold fell below $4,000 for the first time since November earlier this week, silver has lost more than half its value from its peak, and bitcoin has dropped to nearly $58,000.
The three selloffs are not a coincidence. For much of the past two years, they’ve largely been the same trade, and now the same forces are unwinding it.
That trade even has a name: the “devaluation” trade. It’s the bet that high public spending and rising national debt will slowly erode the value of fiat money, pushing investors toward scarce assets that no government can print more of.
Gold and silver are the oldest versions of that bet, while bitcoin—with a limited supply of 21 million coins—was promoted as the digital version. Until 2025, when the dollar seemed vulnerable, money flowed into all three, and they were treated as a single portfolio.
$BTC
Bitcoin has long been lumped together with precious metals as a hedge against a weakening dollar. That trade is unwinding in the face of an aggressive Fed, and bitcoin is falling along with the metals it was supposed to compete with.
Continued AI stock euphoria has drawn capital from across the market, from traditional metals—considered the safest assets—to cryptocurrencies—considered the riskiest.
Gold fell below $4,000 for the first time since November earlier this week, silver has lost more than half its value from its peak, and bitcoin has dropped to nearly $58,000.
The three selloffs are not a coincidence. For much of the past two years, they’ve largely been the same trade, and now the same forces are unwinding it.
That trade even has a name: the “devaluation” trade. It’s the bet that high public spending and rising national debt will slowly erode the value of fiat money, pushing investors toward scarce assets that no government can print more of.
Gold and silver are the oldest versions of that bet, while bitcoin—with a limited supply of 21 million coins—was promoted as the digital version. Until 2025, when the dollar seemed vulnerable, money flowed into all three, and they were treated as a single portfolio.
$BTC