Gold once fell below $4,000, silver halved, bitcoin dropped to $58,000, and currency depreciation trades collapsed across the board.
ChainCatcher reports that gold, silver, and Bitcoin are experiencing simultaneous sharp declines, and this is not a coincidence—the three have collectively formed the theme of “currency depreciation trade” over the past two years, and now are all collapsing under the same macro forces. This week, gold fell below $4,000, down about 28% from its historical high of $5,600 in January 2025; silver has dropped more than 50% from its peak of $120; Bitcoin has fallen about 50% from its October peak, at one point approaching $58,000, and has now broken below the 200-week moving average of about $60,000—a key line widely seen as long-term support for Bitcoin.
The so-called “currency depreciation trade” refers to bets that large-scale government spending and the continuous rise in national debt will erode the purchasing power of fiat currency, thereby driving capital towards scarce assets such as gold, silver, and Bitcoin, which has a supply limit of 21 million coins. During the period of dollar weakness in 2025, all three types of assets attracted significant inflows, and the market treated them as one basket of assets. Now, the forces driving the reversal are also aligned. The first interest rate meeting chaired by the new Federal Reserve Chair, Waller, sent a hawkish signal, and the market is currently pricing in two rate hikes of 25 basis points each by March 2027. The dollar rose 0.8% this week alone. Higher real interest rates raise the opportunity cost of holding non-yielding assets such as gold, silver, and Bitcoin, while a strong dollar puts pressure on buyers using non-dollar currencies.
It is noteworthy that Bitcoin underperformed gold and silver during the rally but is now declining in lockstep, highlighting its awkward position. However, since the February low, Bitcoin has gained 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. Until the Federal Reserve maintains its hawkish stance and the dollar remains strong, Bitcoin will likely struggle to break free from its linkage to precious metals.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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