The ongoing artificial intelligence stock mania has drawn capital from entire markets, from traditional metals, considered the safest assets, to crypto, considered the riskiest.
Earlier this week gold fell below $4,000 for the first time since November, silver has lost more than half its value from its peak, and Bitcoin has slipped to nearly $58,000.
The three sell-offs are no coincidence. They’ve largely had the same business over the past two years, and now the same forces are destroying it.
That trade even has a name, the “devaluation” trade. This is the bet that massive government spending and rising national debt will gradually reduce the value of paper currency, pushing investors toward scarce assets that no government can print more of.
Gold and silver are the oldest versions of that coin, while Bitcoin, with a supply of 21 million coins, is marketed as the digital version. By 2025, as the dollar weakened, money was poured into all three, and they were treated as a basket.