Precious metals and Bitcoin (BTC) are reaching unprecedented heights, mirroring the surge in risk assets like stocks, as the US dollar (USD) is poised for its worst performance since 1973, indicating a “generational” macroeconomic transformation, according to analysts from The Kobeissi Letter.
The S&P 500 stock index has climbed over 40% in the past six months, BTC reached a new all-time peak of over $125,000 on Saturday, and gold is also trading at record levels — $3,880 per ounce at this moment — approaching $4,000, the Kobeissi Letter reported.
“The correlation coefficient between gold and the S&P 500 hit a historic 0.91 in 2024,” the analysts noted, emphasizing that this unusual correlation between safe-haven and risk assets suggests that markets are adapting to a “new monetary policy,” as Kobeissi elaborated:
“There is a significant rush into assets occurring right now. With inflation bouncing back and the labor market softening, the Federal Reserve is lowering rates. The USD is now on course for its worst year since 1973, having dropped over 10% year-to-date. The USD has lost 40% of its purchasing power since 2000.”
This analysis emerged during a US government shutdown, significant downward adjustments in US job statistics pointing to a weakening labor market, interest rate reductions, and escalating concerns about the declining value of the dollar, all of which serve as favorable price catalysts for BTC.
Related: Bitcoin corrects from $125K all-time high: Where will BTC price bottom?
Analysts concur that new BTC all-time high is driven by macroeconomic factors
BTC’s ascent to a new all-time high was propelled by macroeconomic factors, particularly the recent US government shutdown, according to Fabian Dori, chief investment officer at global digital asset bank Sygnum.
The US government shutdown that commenced on Wednesday completely halted operations at various regulatory agencies and bureaucracies, or forced them to function on a minimal budget with limited staff.
The “political dysfunction” triggered by the shutdown has rekindled investor interest in BTC as a store-of-value monetary technology, as trust in traditional institutions diminishes, Dori shared with Cointelegraph.
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