Zeyasse

Key Takeaways:Bitcoin (BTC) surged past $125,000, setting a new all-time high as the U.S. dollar heads for its steepest annual decline in over 50 years.Gold and U.S. equities are also rallying — an unusual alignment of safe-haven and risk assets that analysts say marks a major macroeconomic turning point.Analysts cite rate cuts, inflation rebound, and U.S. government dysfunction as driving forces behind the renewed “flight to hard assets.”Bitcoin and Gold Rally as Dollar Weakens SharplyBitcoin (BTC) and gold both climbed to record highs over the weekend, with BTC last trading around $123,822 and gold nearing $3,900 per ounce, according to market data from TradingView.Analysts at The Kobeissi Letter said the move signals a “generational shift” in global market dynamics. The S&P 500 has gained over 40% in the past six months, while Bitcoin briefly exceeded $125,000 on Saturday — an unprecedented combination of rallies across both safe-haven and risk-on assets.“The correlation coefficient between gold and the S&P 500 reached a record 0.91 in 2024,” The Kobeissi Letter noted.“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, down over 10% year-to-date.”Since 2000, the U.S. dollar has lost roughly 40% of its purchasing power, according to historical data from the Federal Reserve and U.S. Bureau of Labor Statistics — a long-term erosion now accelerating under renewed monetary easing.Analysts: Macro Factors Are Driving Bitcoin’s BreakoutAnalysts agree that Bitcoin’s surge is rooted in macroeconomic shifts rather than short-term speculation.According to Fabian Dori, Chief Investment Officer at Sygnum Bank, Bitcoin’s breakout reflects “rising mistrust in traditional monetary systems” following the U.S. government shutdown and persistent rate-cut expectations.“Political dysfunction and a weakening dollar are amplifying Bitcoin’s store-of-value appeal,” Dori told Cointelegraph. “The narrative of Bitcoin as a hedge against policy-driven debasement has never been stronger.”The U.S. government shutdown has halted operations at key regulatory agencies, delaying ETF reviews and macroeconomic data releases. Combined with Fed rate cuts and soaring inflation expectations, these conditions have accelerated capital rotation into scarce, decentralized assets like Bitcoin and gold.The “Debasement Trade” in Full SwingThe synchronized rise of Bitcoin, gold, and equities underscores a powerful global move into assets that protect against currency debasement — sometimes referred to as the “sound money trade.”Institutional demand is surging, led by record inflows into spot Bitcoin ETFs, while gold’s year-to-date performance has approached 50%, according to Bloomberg and CoinGlass data.“There is a widespread rush into assets happening right now,” Kobeissi added. “Markets are pricing in a new monetary era — one defined by debasement, negative real yields, and the repricing of hard assets.”Bitcoin May Extend Gains as Monetary Easing DeepensWith the dollar weakening, inflation rising, and institutions shifting into digital and physical hard assets, Bitcoin could be poised for further upside in Q4 2025.If BTC breaks decisively above $126,500, analysts say the move could open the path toward the $150,000–$180,000 range before the end of the current cycle.For now, Bitcoin trades just below its record at around $123,800, consolidating amid strong inflows and tightening exchange supply — a sign that long-term holders may once again be accumulating.