The current AI stock frenzy has attracted capital from across the market, from traditional metals, considered the safest assets, to cryptocurrencies, considered the riskiest.
Gold fell below $4,000 for the first time since November earlier this week, silver has lost more than half its value from its peak and bitcoin has fallen to nearly $58,000.
The three sell-offs are not a coincidence. For much of the last two years, they have been largely the same trade, and now the same forces are undoing it.
That trade even has a name: the “downgrade” trade. It’s the bet that heavy government spending and rising national debt will slowly erode the value of paper money, pushing investors into scarce assets that no government can print more of.
Gold and silver are the oldest versions of that bet, while bitcoin, with a supply limited to 21 million coins, was marketed as the digital version. Until 2025, when the dollar looked vulnerable, money flooded into all three and they were treated as a single basket.
