Originally Published 3 months ago — by Wolf Street
The article argues that despite popular fears of US dollar debasement driven by government borrowing and money printing, the bond market and central banks have shown confidence in the dollar's stability, with bond yields falling and central banks reducing assets, contradicting the debasement trade narrative.
The article discusses a long-term shift in global markets called the 'debasement trade,' where investors are moving away from sovereign debt and currencies towards assets like gold and cryptocurrencies due to concerns over government debt, inflation, and potential currency devaluation, amid political and economic uncertainties worldwide.
Investors are increasingly engaging in the 'debasement trade,' moving away from sovereign debt and currencies due to fears of erosion in value caused by governments' growing debt and potential inflation, while seeking refuge in precious metals and cryptocurrencies amid global political and economic uncertainties.
The debasement trade, involving assets like gold and bitcoin as hedges against a weakening dollar, is gaining momentum amid the US government shutdown and ongoing economic uncertainties, with experts predicting continued growth in these assets regardless of the shutdown's duration.
Bitcoin reached a new all-time high of $125,689 amid a broader risk rally driven by the US government shutdown, inflows into Bitcoin ETFs, and a narrative of dollar debasement, with historical trends and legislative support fueling its rise.
Bitcoin neared its all-time high above $123,000 amid a risk rally driven by the US government shutdown, with investors viewing it as a safe-haven asset, supported by rising US equities and increased institutional demand, especially during October historically favorable for the cryptocurrency.