Gold Falls Below $4,000 and Bitcoin Drops Below $61,000 as Debasement Trade Reverses

The macro trade that drove precious metals and crypto to record highs in 2025 is unwinding fast. Gold has dropped 28% from its January 2025 peak of $5,600 and is now trading below $4,000 per ounce. Silver is down more than 50% from its record near $120, slipping under $59 on Wednesday. Bitcoin is not far behind, sitting below $61,000 a 50% drop from its October all-time high.

The sell off comes as markets start pricing in two 25 basis point rate hikes by March 2027 under new Federal Reserve Chair Kevin Warsh, driven by renewed inflation fears.

What Was the Debasement Trade?

Throughout 2025, the dominant macro narrative was simple — government debt was rising, fiscal deficits were growing, and fiat currencies were losing purchasing power. Investors piled into gold, silver and hard assets as a hedge. Bitcoin largely missed the rally, trading sideways around $100,000 while metals surged, leading many to question whether BTC still belonged in that trade at all.

Bitcoin Is Losing Ground But Beating Metals

One thing worth noting bitcoin has actually outperformed both gold and silver since ratios bottomed in February, gaining around 30% against gold and over 55% against silver. But all three have badly lagged US equities in 2026, where the real momentum has been sitting in semiconductor and memory stocks.