Precious metals are experiencing a surge due to the devaluation of the US dollar, with gold reaching $4,000 per ounce and silver climbing to a 45-year high of over $50 per ounce. However, this rally may be losing momentum, leading investors to consider alternative stores of value like Bitcoin (BTC) and tokenized real-world assets.
Gold’s increase of over 50% this year, combined with Goldman Sachs’ prediction of $4,900 per ounce by the end of 2026, indicates that the metal may be “overheated,” according to Nic Puckrin, founder of the Coin Bureau education company. He stated:
“With a more than 50% rise in gold prices year-to-date, attention may shift to other alternatives that reflect a similar outlook. These include various metals and commodities, tokenized real assets, and Bitcoin, which remain undervalued compared to gold.”
Puckrin noted that these assets serve as safeguards against fiat currency inflation and geopolitical instability.
Bitcoin reached a record high of over $126,000 in October, coinciding with the historic rise in precious metals prices. At the same time, confidence in the US dollar is waning, with the currency on track for its worst year since 1973.
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Bitcoin set to gain from US dollar slump
“The USD is on course for its worst year since 1973, down over 10% year-to-date. Since 2000, the USD has lost 40% of its purchasing power,” market analysts at the Kobeissi Letter wrote on Sunday.
The devaluation of the US dollar has triggered a simultaneous flight to store-of-value and risk assets, which typically behave inversely. Safe-haven and store-of-value assets usually gain value when risk assets, such as stocks, decline, and vice versa.
This suggests that investors are recalibrating asset values for a “new era of monetary policy,” where inflation is expected to rise and the government funds operations by further devaluing the currency, inflating all asset prices, the analysts said.
BTC is likely to rise in Q4 as ongoing currency devaluation drives investors to seek safe-haven assets to protect their wealth, according to Matt Hougan, chief investment officer at the investment firm Bitwise.
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