Debasement Trade Has Been Debased 💀 Gold, Silver and Bitcoin All Get Rekt Together

Gold, silver and bitcoin have all dropped sharply from their 2025 peaks as the so-called debasement trade that powered last year's metals rally has reversed course. Gold is down roughly 28% from its January 2025 high of $5,600 per ounce and now trading below $4,000, while silver has fallen more than 50% from a record near $120, slipping beneath $59 per ounce on Wednesday, according to market data.

The sell-off has been driven largely by fears of tighter monetary policy under new Federal Reserve Chair Kevin Warsh. Markets are currently pricing in two 25 basis point rate hikes by March 2027, which would lift the federal funds rate to 4.00%-4.25% on renewed inflation concerns. The shift marks a dramatic reversal of the dominant macro narrative of 2025, the debasement trade, premised on the view that persistent fiscal deficits and rising government debt would erode the purchasing power of fiat currencies.

Bitcoin stagnated through much of 2025, hovering around the $100,000 level while gold and silver rallied aggressively, leading many investors to question whether $BTC still functioned as a hedge against fiat currency dilution. The cryptocurrency has continued to fall in the broader correction and now sits below $62,000, a 50% drawdown from its October all-time high, trading beneath its long-term 200-week moving average of approximately $62,800.

Against the metals, $BTC has outperformed since the ratios bottomed in February, gaining roughly 30% against gold and more than 55% against silver. All three assets, however, have lagged U.S. equities in 2026, where momentum remains concentrated in semiconductor and memory-related stocks.