Gold, silver and bitcoin tumble as 'debasement' trade unwinds
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- Gold has dropped roughly 28% from its January 2025 peak of $5,600/oz and now trades below $4,000, while silver has fallen more than 50% from a record high near $120, slipping beneath $59/oz on Wednesday.
- Bitcoin sits below $62,000 — a 50% correction from its October all-time high — and is trading below its 200-week moving average of approximately $62,800.
- Markets are pricing in two 25 basis point rate hikes by March 2027 under new Federal Reserve Chair Kevin Warsh, which would lift the federal funds rate to 4.00%-4.25%.
- Bitcoin stagnated around $100,000 throughout much of 2025 while gold and silver rallied, then gained roughly 30% against gold and 55% against silver after the ratios bottomed in February — though all three assets still lag U.S. equities in 2026, where momentum sits in semiconductor and memory stocks.
- In May, combined crypto exchange volumes fell 3.45% to $4.41 trillion — the lowest since September 2024 — while RWA perpetual futures volumes rose 10.4% against the trend to a new all-time high.
Why it matters: The 2025 debasement trade thesis — that fiscal deficits would erode fiat purchasing power and boost hard assets — is breaking as markets price in Fed tightening. Gold holders face 28% drawdowns, silver holders over 50%, and bitcoin is in a 50% correction, testing the hedge narrative across all three asset classes at once.
