The ongoing artificial intelligence stock frenzy has pulled in capital from across the market, from traditional metals, considered the safest assets, to crypto, considered the riskiest.
Gold dropped below $4,000 for the first time since November earlier this week, silver has lost more than half its value from its high, and bitcoin has slipped to nearly $58,000.
The three selloffs are not a coincidence. For much of the past two years, they have been, to a large degree, the same trade, and now the same forces are unwinding it.
That trade even has a name, the “debasement” trade. It is the bet that heavy government spending and rising national debt will slowly erode the value of paper money, which pushes 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 supply capped at 21 million coins, got marketed as the digital version. Through 2025, as the dollar looked vulnerable, money poured into all three, and they were treated as one basket.
What groups them on the way up also groups them on the way down. The new Federal Reserve chair, Kevin Warsh, struck a hawkish tone at his first meeting, and markets are now pricing two quarter-point rate hikes by March 2027, which would lift the Fed's benchmark rate to 4.00% to 4.25%. The U.S. dollar has climbed 0.8% this week alone.
Both of those work directly against hard assets. Higher rates lift real yields, the return on safe assets like Treasuries after accounting for inflation, which raises the cost of holding gold, silver or bitcoin, none of which pay any yield.
A stronger dollar makes all three more expensive for buyers using other currencies. So when gold and silver fall, it is usually a signal that the macro regime has turned against this narrative.
Bitcoin's place in the basket has always been awkward. Through most of 2025, as gold and silver rallied hard, bitcoin went sideways near $100,000. That divergence opened a question of whether it still belonged in the debasement trade at all, or whether its role as a hedge against currency dilution had faded.
But a rather uncomfortable occurrence now is that bitcoin lagged the metals on the way up, but is tracking them closely on the way down.