Mars Finance News, gold, silver, and Bitcoin are experiencing simultaneous sharp declines—this is no coincidence. Over the past two years, they have collectively formed the "currency debasement trade" theme, and now they are all collapsing under the same macro shock. This week, gold fell below $4,000, down about 28% from its all-time high of $5,600 in January 2025; silver dropped over 50% from its high of $120; Bitcoin has fallen about 50% from its October peak, once approaching $58k, and has broken below its 200-week moving average of around $60k—a key level widely seen as long-term support for Bitcoin. The so-called "currency debasement trade" is a bet that massive government spending and rising national debt will erode the purchasing power of fiat currency, thereby driving capital into scarce assets such as gold, silver, and Bitcoin, which has a supply cap of 21 million. During the dollar's weakness in 2025, these three asset classes simultaneously attracted large inflows and were treated as a single basket by the market. Now, the forces driving the reversal are equally consistent. The first FOMC meeting under new Fed Chair Walsh sent a hawkish signal, and the market is currently pricing in two 25-basis-point rate hikes by March 2027. The dollar rose 0.8% this week alone. Higher real interest rates increase the opportunity cost of holding non-yielding assets like gold, silver, and Bitcoin, while a strong dollar pressures buyers using other currencies. Notably, Bitcoin underperformed gold and silver during the rally but has followed them closely during the decline, highlighting its awkward position. However, since its February low, Bitcoin has risen about 30% against gold and over 55% against silver, showing some relative improvement. Analysts point out that Bitcoin plays dual roles as both a speculative risk asset and a hard-currency hedge, and currently both logics point downward. As long as the Fed maintains its hawkish stance and the dollar remains strong, Bitcoin will likely struggle to decouple from its correlation with precious metals.

GLDX-0.18%

PAXG-0.05%

BTC-0.57%

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Gold once fell below $4,000, silver was cut in half, and Bitcoin dropped to $58,000, as debasement trades unraveled completely.

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