Analysts warn of a “generational” shift as Bitcoin, gold, and stocks soar while the US dollar faces its worst year since 1973 due to inflation and rate cuts.
Bitcoin and gold hit all-time highs as dollar posts worst year since 1973
Bitcoin and precious metals continue to rise while the US dollar faces its worst year since 1973, which analysts at The Kobeissi Letter say indicates a “generational” shift in global macroeconomics.
The S&P 500 is up more than 40% in the past six months, Bitcoin has hit an all-time high of over $125,000, and gold is trading near $4,000 an ounce, a new record.
“The correlation coefficient between gold and the S&P 500 reached a record high of 0.91 in 2024,” analysts note.
“This means that markets are pricing in a new monetary policy: a massive shift into hard assets.”
Dollar weakens, markets seek protection
Inflation is picking up again, the labor market is slowing, and the Fed is cutting rates, which has led to a drop of more than 10% since the beginning of the year.
Since 2000, the dollar has lost 40% of its purchasing power, Kobeissi estimates.
Among the factors fueling Bitcoin’s rise:
- the US government shutdown,
- weak employment figures,
- the Fed’s rate cut,
- growing demand for safe-haven assets.
Bitcoin is a “store of value technology”
According to Fabian Dori, chief investment officer at Sygnum Bank, BTC’s current rise is the result of macroeconomic factors, not just speculation.
“The political dysfunction in Washington and the decline in trust in institutions are forcing investors to look for alternatives — and Bitcoin is the best looking,” he said.
On Wednesday, federal agencies were shut down or on minimal funding due to the shutdown, which increased capital outflows from the dollar.
Bottom line
Gold, stocks and cryptocurrencies are moving in unison against the dollar for the first time, signaling a new phase in the global liquidity cycle. For investors, this is a signal that the “dollar generation” is being replaced by an era of digital assets and real values.
Related: Robert Kiyosaki: Bitcoin, Ether, gold are “hard money”
