The Debasement Trade Hit Reverse: Gold, Silver and $BTC All Brakes at Once 🪙

Gold and silver have both retreated sharply from their January 2025 highs, falling below key psychological milestones. Gold is down roughly 28% from its January peak of $5,600 and is now trading below $4,000 per ounce, while silver has fallen more than 50%, slipping beneath $59 per ounce on Wednesday. Bitcoin ($BTC) has continued to slide during the broader correction, sitting below $62,000 and trading under its long-term 200-week moving average of approximately $62,800. The cryptocurrency is now down 50% from its October all-time high.

The sell-off has been driven largely by growing 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% amid renewed inflation concerns. The repricing marks a dramatic shift from the dominant macro narrative of 2025, the "debasement trade," built on the belief that persistent fiscal deficits and rising government debt would continue to erode the purchasing power of fiat currencies.

Bitcoin, however, largely stagnated throughout much of 2025, trading around the $100,000 level while gold and silver rallied aggressively. The divergence led many investors to question whether bitcoin still belonged in the debasement trade and whether its role as a hedge against fiat currency dilution had weakened. Despite the recent drawdown, the cryptocurrency has outperformed both precious metals since the BTC/gold and BTC/silver ratios bottomed in February, gaining roughly 30% against gold and more than 55% against silver.

All three assets have lagged U.S. equities in 2026, where momentum remains concentrated in semiconductor and memory-related stocks. The rotation underscores how the macro thesis that lifted gold, silver and bitcoin in 2025 has unraveled in lockstep as rate-cut expectations give way to a tighter policy outlook.