Gold, Silver, and Bitcoin Decline as Debasement Trade Unravels

Gold has decreased by approximately 28% from its January 2025 peak of $5,600 per ounce and is currently trading below $4,000. Meanwhile, silver has lost over 50% from its record high, dipping under $59 per ounce. This sharp decline is primarily attributed to increasing concerns over tighter monetary policy under the new Federal Reserve Chair, Kevin Warsh.

With markets anticipating two 25 basis point rate hikes by March 2027, the federal funds rate could rise to between 4.00% and 4.25% to manage growing inflation fears. This shift represents a notable change from the previous macroeconomic narrative centered around the "debasement trade," which posited that ongoing fiscal deficits and increasing government debt would erode the value of fiat currencies.

In contrast to gold and silver, Bitcoin has largely stagnated, price-wise, throughout much of 2025. After trading around the $100,000 mark for most of that time, Bitcoin is now priced below $62,000, marking a 50% pullback from its October all-time high and dropping below its long-term 200-week moving average of approximately $62,800.

Although Bitcoin has underperformed compared to U.S. equities in 2026, it has outpaced both gold and silver since February, with gains of about 30% against gold and over 55% against silver. This performance may provide a glimmer of hope for Bitcoin advocates, even as all three assets remain behind the momentum present in semiconductor and memory-related stocks in the broader equity markets.