Investors Shifting Focus from Precious Metals to Bitcoin Amid Market Changes
As precious metals reach new heights, analysts suggest a trend towards Bitcoin and other assets as alternatives.
As precious metals soar, driven by the depreciation of the US dollar, gold has surged to $4,000 per ounce, while silver has peaked over $50, marking a 45-year high. This surge in precious metals might be nearing its peak, prompting investors to consider alternatives like Bitcoin (BTC) and tokenized real-world assets.
Market Observations
According to Nic Puckrin, founder of Coin Bureau, gold’s impressive 50% rise this year and Goldman Sachs’ expected price of $4,900 by the end of 2026, indicate a potential overvaluation. He stated:
“After more than a 50% increase in gold prices thus far this year, focus may now shift to other alternatives that express a similar perspective. These include other metals, tokenized physical assets, and Bitcoin, which is undervalued compared to gold.”
Gold rallies to a new all-time high of over $4,000. Source: TradingView
Puckrin remarked that these assets are appealing as hedges against both inflation of fiat currencies and geopolitical instability.
Bitcoin recently reached a record high of over $126,000 in October during this precious metals surge, alongside a decline in confidence towards the US dollar, which is projected to have its worst year since 1973.
Implications of US Dollar Decline
Analysts from the Kobeissi Letter reported:
“The USD is now heading for its worst year since 1973, depreciating over 10% year-to-date, resulting in a 40% loss of purchasing power since 2000.”
This currency debasement has prompted a simultaneous movement into both store-of-value and risk assets, typically counteracting one another.
Bitcoin’s price surges as the DXY declines, indicating the strength of the US dollar. Source: TradingView
Such observations suggest that the market is adjusting for a new monetary policy era, characterized by rising inflation and further currency devaluation, which means appreciating asset prices across the board.
As a result of the ongoing currency debasement, BTC is positioned for a significant surge in Q4, as investors look to preserve wealth by investing in safe-haven assets, according to Matt Hougan from Bitwise.
