Gold prices surged to record highs on Wednesday as silver and bitcoin also experienced substantial gains. Investors are increasingly turning to these assets as a hedge against rising government debt and a broader shift away from traditional fiat currencies, which analysts have described as part of the “debasement trade.”
Gold futures rose above $4,060 per troy ounce, achieving a new peak, while silver futures climbed to $48.70, reaching their highest level in decades. Bitcoin, the leading cryptocurrency, hovered near $123,000, just below its recent record of nearly $125,790 reached on Monday.
These movements underscore a trend where investors are gravitating toward hard assets and cryptocurrencies in response to concerns about the diminishing value of fiat currencies, driven by inflation, significant government spending, and accumulating debt due to money creation.
In a recent analysis, JPMorgan noted the rise of precious metals and cryptocurrencies in the context of the US dollar, which has weakened significantly over the year—down about 9% year-to-date. This dollar depreciation has led to a flight towards safer assets amidst fiscal uncertainties in developed markets. In Japan, the unexpected selection of Sanae Takaichi as the next prime minister is seen as a shift toward a “Run It Hot” fiscal policy, wherein heavy government deficits are anticipated to spur economic growth.
Nomura Securities analyst Charlie McElligott highlighted in a note that such developments indicate a renewed focus on precious metals and cryptocurrencies, which he views as the leading beneficiaries of the current debasement trade that also positively influences equities.
Gold and silver futures have experienced substantial increases of approximately 55% and 65% year-to-date, respectively. These gains have been fueled by expectations of Federal Reserve rate cuts, which typically bolster the appeal of metals. Notably, the last quarter saw record inflows into gold-backed exchange-traded funds, leading Goldman Sachs analysts to revise their gold price forecast for December 2026 from $4,300 to $4,900 per troy ounce.
Goldman Sachs noted that continued inflows from Western ETFs and potential central bank purchases are contributing to a higher starting price point for their forecasts.
On the cryptocurrency front, bitcoin’s value has escalated by about 33% year-to-date, entering October, traditionally its strongest month. The ongoing US government shutdown has further enhanced bitcoin’s appeal as a safe haven, prompting investors to transition from US-related assets, such as treasuries, towards assets that can withstand political and inflationary pressures, according to Farzam Ehsani, CEO of crypto exchange VALR.
Looking ahead, Wall Street projects further growth in the cryptocurrency sector, driven by stablecoin adoption, which is believed to usher in the next wave of crypto market expansion. This sentiment was echoed by Samir Kerbage, chief investment officer at Hashdex, who anticipated that market shifts from stablecoin usage might take six months to a year to fully manifest in pricing.
In parallel, stocks related to the cryptocurrency space have experienced impressive growth, with stablecoin issuer Circle’s shares soaring 115% since its initial public offering in June. Other notable performances include trading platform Robinhood, which has jumped 290% year-to-date, and Coinbase, up 51% since the year’s beginning, albeit lower than its all-time high in July.
