Precious metals are soaring in response to the devaluation of the US dollar, with gold hitting $4,000 an ounce and silver hitting a 45-year high of over $50 an ounce. Still, the precious metals rally may be losing steam, paving the way for investor rotation toward alternative store-of-value assets like Bitcoin (BTC) and real-world tokenized assets.
Gold’s more than 50% rally so far this year, coupled with Goldman Sachs’ forecast of $4,900 per ounce by the end of 2026, suggests the metal is “overheated,” according to Nic Puckrin, founder of educational company Coin Bureau. He said:
“After a more than 50% rally in the price of gold so far this year, attention can now turn to other alternatives that express a similar view. These include other metals and commodities, tokenized real assets and Bitcoin, which remain undervalued against gold.”
Puckrin added that all of these assets serve as a hedge against fiat currency inflation and geopolitical uncertainty.
Bitcoin hit a record high of over $126,000 in October, along with a historic rise in precious metals prices. Meanwhile, investors are losing confidence in the US dollar, which is on track for its worst year since 1973.
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Bitcoin set to benefit from falling US dollar
“The dollar is on track for its worst year since 1973, with a drop of more than 10% so far this year. The dollar has lost 40% of its purchasing power since 2000,” market analysts at the Kobeissi Letter wrote on Sunday.
The devaluation of the US dollar has caused a simultaneous rush into store of value and risk assets, which are typically opposites of each other. Safe-haven and store-of-value assets typically rise in value when risky assets, such as stocks, fall, and the opposite is also true.
This indicates that investors are revaluing assets for a “new era of monetary policy,” one in which inflation rises and the government finances operations by further devaluing the currency, causing all asset prices to rise, analysts said.
BTC is positioned to rise in the fourth quarter as a result of the current currency debasement, as investors look to preserve wealth by accumulating safe haven assets, according to Matt Hougan, chief investment officer at investment firm Bitwise.
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