Precious metals are soaring in response to the depreciation of the dollar, with gold reaching $4,000 per ounce and silver hitting a high of over $50 per ounce for the first time in 45 years. However, the momentum in precious metals may be waning, paving the way for investors to turn to Bitcoin (BTC) and tokenized real-world assets as alternative stores of value.
According to Nic Puckrin, founder of the educational company Coin Bureau, gold's more than 50% increase this year—along with Goldman Sachs predicting $4,900 per ounce by the end of 2026—indicates that the metal is "overheated." He stated:
Puckrin added that these assets can serve as tools to hedge against fiat currency inflation and geopolitical uncertainty.
Bitcoin reached a historic high of over $126,000 in October, coinciding with the historic surge in precious metal prices. Meanwhile, investors are losing confidence in the dollar, which is heading toward its worst year since 1973.
"The dollar is now heading toward its worst year since 1973, down more than 10% year-to-date. Since 2000, the dollar has lost 40% of its purchasing power," wrote a market analyst from the Kobeissi Letter on Sunday.
The depreciation of the dollar has triggered a rush for both stores of value and risk assets, which are typically opposing forces. When risk assets like stocks decline, safe-haven and store-of-value assets usually appreciate, and vice versa.
Analysts indicate that this suggests investors are re-pricing assets for a "new era of monetary policy," where inflation runs higher, and governments finance operations through further currency devaluation, leading to rising prices for all assets.
According to Matt Hougan, Chief Investment Officer of investment firm Bitwise, BTC is expected to surge in the fourth quarter due to ongoing currency devaluation, as investors seek to preserve value by heavily investing in safe-haven assets.
Related: Bitcoin (BTC) Still Has Room for Growth: Analyst Says $300,000 Price Target Remains Possible
Original: “Analyst: Precious Metals Trade ‘Overheated,’ Investors May Rotate to Bitcoin (BTC) in Q4”
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