How Will the Rise of Bitcoin and Gold Will Result in De-Dollarization?

The global financial space is facing a significant shift as investors are increasingly seeking safe-haven assets like gold, silver, and Bitcoin. Amid this shift, Citadel's Ken Griffin warns of a potential de-dollarization, with substantial asset inflation away from the dollar.

With the federal government shutdown and potential rate cuts on the horizon, investors are betting big on precious metals and cryptocurrencies, sparking debates about a possible de-dollarization era. This situation leads to an ultimate question: Will Bitcoin, gold, and silver replace the dollar?

Ken Griffin Warns of De-Dollarization; Know Why

In a recent Bloomberg post , Citadel founder Ken Griffin shed light on the shifting investor interest, where the mass moves to gold, silver, and Bitcoin. According to Griffin, this changing sentiment could lead to de-dollarization and de-risking portfolios amid US sovereign risk. “We’re seeing substantial asset inflation away from the dollar as people are looking for ways to effectively de-dollarize, or de-risk their portfolios vis-a-vis US sovereign risk,” he said.

Further, he explained the debasement trade where investors flock to these safe-haven assets amid economic uncertainty. As the US government shutdown drags on and the Fed’s interest decision is pending, the community is largely influenced by fears of a larger political crisis. This, in turn, resulted in the growth of Bitcoin and gold, both of which have risen to a new all-time high amid the government shutdown.

Safe Haven Assets Grow Amid Economic Uncertainty

“We’re definitely on a bit of a sugar high in the US economy right now,” said the Citadel founder. Speaking at the Citadel Securities conference for institutional clients in Manhattan, he added,

“Fortunately, we’re in a sector of the economy where a $100,000 one-time cost to hire a person is not going to be make it or break it,” Griffin said. “I worry far more about the brilliant student in India who doesn’t come to America, or the gifted student in mathematics and physics that chooses to stay in China.”

Gold is currently priced at $3,959.45, up by 0.18% in a day, 8.86% in a month, 33% in the last six months, and a massive 50% in a year. Similarly, Bitcoin is also on a positive track, currently trading at $124k, hovering around its recent ATH of $125k. BTC is up by 0.1% in a day, 9% in a week, and 12% in a month. Driven by the prevailing trend, VanEck Head Matthew Sigel predicted that BTC will hit a massive high of $644,000 after the next halving event.