MacroEconomics

In a striking alignment of financial forces, Bitcoin, gold, and equities are all hitting record highs, an event that challenges decades of traditional market behavior. Analysts are calling it a “generational macroeconomic shift”, one that may redefine how capital seeks safety and value in the digital age.
According to market intelligence group The Kobeissi Letter, the U.S. dollar (USD) is on track for its worst annual performance since 1973, declining over 10% year-to-date. Meanwhile, Bitcoin (BTC) surged beyond $125,000, gold is nearing $4,000 per ounce, and the S&P 500 has climbed more than 40% in just six months.
For the first time in decades, both risk-on assets like stocks and safe-haven assets like Bitcoin and gold are moving up together — signaling a potential rewriting of monetary norms.
What’s Driving This Unusual Correlation?
Historically, assets like gold and Bitcoin thrive when confidence in fiat money falters usually during economic distress or inflationary cycles. However, the current scenario is different: both speculative and defensive assets are rallying simultaneously.
The correlation coefficient between gold and the S&P 500 hit a record 0.91 in 2024, the highest in history. This means they’re moving nearly in lockstep, an anomaly that reflects how investors are repositioning for a world where monetary policy is structurally changing.
At the center of this transformation lies a trifecta of forces:
Monetary Policy Pivot – The Federal Reserve is cutting interest rates to counter slowing growth and rising unemployment, after years of tightening. Lower rates weaken the USD but boost liquidity, pushing investors toward alternative stores of value like Bitcoin and gold.Erosion of Fiat Confidence – The U.S. dollar has lost roughly 40% of its purchasing power since 2000. With inflation rebounding and fiscal deficits widening, investors are seeking assets with scarcity and neutrality, a narrative that perfectly fits Bitcoin’s fixed-supply design.Institutional Repricing of Risk – Traditional portfolios are being restructured. Where once gold and bonds were the primary hedges, Bitcoin and tokenized assets are now emerging as modern alternatives in multi-asset strategies.
From Speculative Asset to Monetary Benchmark
Bitcoin’s recent performance underscores its evolution beyond a speculative trade. Analysts from Sygnum Bank note that macroeconomic instability, including the U.S. government shutdown and labor market weakness, has driven renewed faith in Bitcoin as a “monetary technology”, not just an investment.
Each time traditional institutions face dysfunction, BTC’s decentralized nature becomes more appealing. The recent government shutdown highlighted this: as agencies froze operations, Bitcoin’s network remained open, borderless, and permissionless.
Unlike fiat systems, which rely on trust in policymakers, Bitcoin’s system relies on mathematical finality. It’s this difference between human discretion and algorithmic certainty, that has investors reassessing what it means to “store value.”
The Dollar’s Decline and the Repricing of Global Value
Since the end of the Bretton Woods system in 1971, the U.S. dollar has been the world’s dominant reserve currency. Its strength has long shaped global trade, commodities pricing, and capital flows.
But when the dollar weakens this sharply, as it is now, it triggers a global portfolio rotation. Central banks diversify reserves into gold, sovereign wealth funds rebalance toward equities and commodities, and private investors move into Bitcoin and digital assets.
This isn’t just about speculation, it’s about hedging against systemic erosion.
As The Kobeissi Letter explains:
“There is a widespread rush into assets happening right now. As inflation rebounds and the labor market weakens, the Federal Reserve is cutting rates. The USD is now on track for its worst year since 1973.”
In other words, capital is fleeing cash and moving into assets that can outpace inflation, retain value, or exist beyond central control.
Why Gold and Bitcoin Are Rising Together
For decades, gold was the undisputed store of value. Bitcoin has now joined that conversation, not as a replacement, but as a complementary digital counterpart.
Gold represents stability through history; Bitcoin represents stability through technology. Both share fundamental traits: scarcity, global recognition, and independence from government issuance.
The simultaneous rise of both assets suggests a broader crisis of confidence in fiat systems, rather than a speculative bubble. Investors are hedging not just against inflation, but against monetary instability itself.
A Monetary Evolution, Not a Crisis
What’s happening isn’t merely a market anomaly, it’s a monetary evolution.
When safe-haven and risk assets both appreciate, it means investors are no longer differentiating between “growth” and “safety” they’re seeking real, non-inflationary stores of value in any form.
Bitcoin’s performance in this environment reinforces its thesis: it behaves like digital gold, yet offers liquidity, divisibility, and global accessibility unmatched by traditional assets.
This convergence marks the beginning of a post-fiat investment era, where value is increasingly defined by trustless systems, algorithmic supply, and cross-border utility.
The Takeaway: A Generational Shift in Wealth Preservation
The data paints a clear picture, the U.S. dollar is weakening, inflation is reaccelerating, and central banks are reintroducing liquidity. Amid this, investors are rewriting the rules of diversification.
Bitcoin is emerging as a 21st-century hedge, immune to political risk.Gold remains the timeless store of value.Equities continue to attract liquidity from monetary easing.
This triad moving together signals a macro reset unlike any seen since the 1970s oil shock and gold decoupling era.
As traditional monetary systems strain under debt and inflation, Bitcoin’s fixed-supply model is no longer theory, it’s policy-proof reality.
The world is witnessing a gradual handoff: from centralized monetary management to decentralized value consensus. And that transition may define the next half-century of finance.
#Bitcoin #MacroEconomics #DigitalGold #USD #GlobalEconomy

1️⃣. The FED and PCE Inflation Are Pressuring the Crypto Market
✅ On December 18th, during the Federal Open Market Committee (FOMC) meeting, FED Chair Jerome Powell carried out the third interest rate cut of the year, as anticipated by the market. However, he also took a more hawkish stance on monetary policy for 2025. Due to signs of rising PCE inflation, the FED now plans to reduce interest rates only twice in 2025, instead of the four times previously expected.

✅ Financial markets immediately reacted negatively to this announcement, and the crypto market, being highly sensitive to macroeconomic factors, was no exception:
Bitcoin dropped from $108,000 to $92,000, losing over 15% of its value. Altcoins declined by an average of 20%-50%, with some returning to price levels seen when Bitcoin was below $60,000.

2️⃣. The Importance of Macroeconomic Factors for the Crypto Market
✅ Currently, the total market capitalization of crypto stands at $3.5 trillion, equivalent to the GDP of the United Kingdom. Although still small compared to the global capital markets, crypto’s current size means it cannot avoid being affected by global macroeconomic trends.

✅ The crypto market’s growth throughout 2024 was driven by a series of favorable conditions:
Improved global liquidity, reflected in the growth of the M2 money supply from major central banks.FED’s continuous rate cuts in 2024, providing conditions for capital flows into risk assets like Bitcoin and altcoins.Pro-Crypto policies from President Donald Trump, boosting confidence in the market.

✅ However, the current landscape is rapidly changing. The PCE inflation index – the FED’s preferred measure of inflation – is showing signs of rising again, while the FED’s tightening monetary policy remains in effect. The FED not only keeps interest rates high but is also withdrawing liquidity from the market by reducing its asset holdings (such as bonds) on its balance sheet. If inflation continues to rise sharply, the FED may even raise interest rates again, potentially accepting an economic crisis, as it has done in the past, to combat inflation.

3️⃣. PCE Inflation and the Future of the Crypto Market
✅ In a context of persistent inflation, crypto – which is considered a high-risk asset – will face significant challenges if the FED maintains high interest rates or raises them again:
Liquidity Drain: Higher capital costs will lead to reduced flows into risk assets.Declining Value: Bitcoin and altcoins will struggle to remain attractive as traditional assets like bonds become more appealing.Market Sentiment: Pessimism may spread if inflation spirals out of control, potentially triggering another crypto winter.

4️⃣. Strategies to Prepare for the Future
✅ For crypto investors, closely monitoring macroeconomic indicators is essential. Among them, the PCE inflation index in the United States is currently the most critical:
If PCE stabilizes or decreases, crypto can continue its long-term growth trend.If PCE rises sharply, prepare for a scenario of significant corrections, or even a prolonged crypto winter.

✅ Additionally, building a long-term strategy is crucial:
Diversify portfolios to reduce concentration risk in highly volatile altcoins.Consider holding a portion of assets in stablecoins or less risky instruments to preserve capital.Keep a close eye on the FED’s actions and global monetary policies to adjust strategies promptly.

5️⃣. Conclusion
✅ The mantra “Don’t fight the FED” has always been true for financial markets, and crypto is no exception. With a market capitalization of $3.5 trillion, crypto is no longer a market that operates “outside” macroeconomic forces. While the growth seen in 2024 was fueled by favorable conditions, this may not last forever. To succeed in this market, investors must always prepare for the worst scenarios and remain adaptable to changes in the macroeconomic environment.
✅ Investing without considering the macroeconomic environment is like farming without checking the weather forecast. Every sector is interconnected, and we cannot analyze any single field in isolation.


#BitcoinAnalysis
#MacroEconomics
#FEDPolicy
#InflationImpact
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