Gold and silver have both retreated sharply from their January 2025 highs, falling below key psychological milestones. Gold is down roughly 28% from its January peak of $5,600 and now trading below $4,000 per ounce, while silver has fallen more than 50%, slipping beneath $59 per ounce on Wednesday.
The sell-off has been driven largely by growing fears of tighter monetary policy under new Federal Reserve Chair Kevin Warsh. Markets are currently pricing in two 25 basis point rate hikes by March 2027, which would lift the federal funds rate to 4.00%-4.25% due to renewed inflation fears.
The reversal marks a dramatic shift from the dominant macro narrative of 2025, the “debasement trade”, the belief that persistent fiscal deficits and rising government debt would continue to erode the purchasing power of fiat currencies.
Bitcoin, however, largely stagnated throughout much of 2025, trading around the $100,000 level while gold and silver rallied aggressively. The divergence led many investors to question whether bitcoin still belonged in the debasement trade and whether its role as a hedge against fiat currency dilution had weakened.
Bitcoin has continued to fall during the broader correction. The cryptocurrency now sits below $62,000, a 50% correction from its October all-time high and is trading below its long term 200 week moving average of approximately $62,800.
Bitcoin leads metals, lags equities
One silver lining for bitcoin bulls is that the cryptocurrency has outperformed both precious metals since the ratios bottomed in February, gaining roughly 30% against gold and more than 55% against silver.
However, all three assets have lagged U.S. equities in 2026, where momentum remains concentrated in semiconductor and memory-related stocks.
