Gold, Bitcoin and Stocks Surge Together…"A Sign of Dollar Anxiety, Not a Real Boom"

Gold, Bitcoin (BTC), and stocks are surging simultaneously, creating an unusual 'asset rally.' Experts warn that distrust in the falling value of the dollar, rather than productivity improvements, is driving the rise in asset prices.

On the 6th (local time), BeInCrypto reported that gold, silver, and Bitcoin, along with the US S&P500 index, continue to be on the rise. In particular, Bitcoin, amid the 'Uptober' rally, surpassed 125,000 dollars, rising more than 10% in a week, while gold has set record highs 40 times this year alone, reaching a market capitalization of 26.3 trillion dollars. Silver has also risen more than 60% so far this year.

Financial analysis firm The Kobeissi Letter analyzed, "The correlation coefficient between gold and the S&P500 reaches 0.91, meaning the two assets have moved in the same direction 91% of the time this year," calling it "an abnormal phenomenon in which safe-haven assets and risk assets rise simultaneously."

Market experts point out that this simultaneous rise is due to weakened confidence in the value of the US dollar, not real economic growth. The Kobeissi Letter reported, "The dollar is recording its worst annual performance since 1973, falling 10% just this year." The dollar's purchasing power has declined by about 40% since 2020.

The US Federal Reserve (Fed)'s accommodative monetary policy has also influenced this trend. According to the CME FedWatch tool, the market is pricing in a 95.7% chance of an additional rate cut at the October meeting. The Kobeissi Letter said, "The Fed is cutting rates while inflation remains high," and called it "a move reflecting assets entering a new era of monetary policy."

Market analyst Shanaka Anslem Perera said, "In a phase of inflation amid rate cuts, the simultaneous rise of gold, Bitcoin, stocks, and real estate is a sign of a 'slow-moving currency panic,'" adding, "This indicates a collapse in the currency's purchasing power rather than an increase in asset values."

Ultimately, experts diagnose that this rally is not a sign of economic growth but the result of declining fiat currency values and asset-protection psychology. Perera added, "This is not a boom, but the final stage of a system held together by paper."