‘The debasement trade’: is this what’s driving gold, bitcoin and shares to record highs?

What impact is it having?

Some asset prices are hitting the roof. Gold has had more highs than a 1970s rock star this year, hitting $4,000 an ounce for the first time on Wednesday. It has surged by 50% during 2025.

Bitcoin is also having a rollicking year, up more than 20% since January, hitting the $125,000 mark for the first time on Monday.

But the dollar, which underpins the global financial system, has dropped by about 9% since the start of the year against a basket of other currencies, as its status as the global reserve currency has come under strain.

Ken Griffin, the founder and chief executive of the hedge fund Citadel, said this week that investors were looking for ways to “effectively de-dollarise and de-risk their portfolios vis-a-vis US sovereign risk”.

“Inflation is substantially above target and substantially above target in all forecasts for next year. And it’s part of the reason the dollar’s depreciated by about 10% in the first half of this year. It’s the single biggest decline in the US dollar in six months, in 50 years,” Griffin told the Citadel Securities future of global markets conference.

Government long-term borrowing costs have also risen, as investors have shunned long-dated bonds out of fear that inflation will eat away their value. This is the worst decade on record for government bonds, according to recent Deutsche Bank data.

The weakness of the US dollar, and the rise in alternative assets, raises speculation that bitcoin could serve as a credible reserve asset alongside gold.

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“A strategic bitcoin allocation could emerge as a modern cornerstone of financial security, echoing gold’s role in the 20th century,” suggested Deutsche Bank’s Marion Laboure and Camilla Siazon this week, who predicted both assets were likely to feature on central bank balance sheets by 2030.