"Who's buying dollars these days?" reverses…the identity of 'this' bought in succession

Gold, coins, and stocks all rising at once in an 'everything rally'

The 'debasement trade' becomes mainstream

As countries take on massive debt

Investments hedging against currency depreciation spread

Gold, Bitcoin, and the S&P hit 'record highs'

Wall Street keeps raising Bitcoin price targets

"Still not up enough; will reach 180,000 dollars"

U.S. and European investors also betting on gold ETFs

"Markets are beginning to understand that governments are intending to solve debt through inflation. Asset bubbles could keep expanding." (Eric Peters, founder of One River Asset Management)

Gold and Bitcoin prices simultaneously hit record highs. Major stock indices in New York such as the S&P 500, as well as leading indices in Japan and Korea, are also making record runs. An 'everything rally'—where it's hard to find any asset that isn't rising—has emerged. Analysts say a 'debasement trade' is spreading, with investors flocking to alternative assets like gold and Bitcoin to hedge against declines in the value of major currencies such as the U.S. dollar and the Japanese yen.

◇Gold stabilizes in the 4,000-dollar range

On the 8th (local time) at the New York Mercantile Exchange, the December-delivery gold futures settlement price closed at 4070.5 dollars per troy ounce, up 1.7% from the previous day, setting a new closing record. After breaking 4,000 dollars per troy ounce for the first time the previous day, it has settled into the 4,000-dollar range. The leading cryptocurrency Bitcoin is also trading at record highs above 120,000 dollars. It has risen more than 10% from the late-September low of 109,000 dollars.

Despite a temporary federal government shutdown and concerns over an 'AI bubble', major U.S. indices such as the S&P 500 and the Nasdaq both reached record highs. According to Dow Jones Market Data, this is the first time since 1975 that gold and the S&P 500 have hit record highs on the same day.

Japan's Nikkei 225 is also on a record run as Sanae Takaichi, who emphasizes aggressive fiscal policy, has emerged as a leading candidate for the next prime minister.

Typically, when a safe-haven asset like gold rises, risk assets such as stocks and virtual assets tend to fall—an inverse correlation. But now stocks, gold, and Bitcoin are all rising together—a 'strange phenomenon.' Bloomberg reports that worries over rising public debt in major countries are driving a spread in 'debasement trades' as investors hedge against currency depreciation.

JPMorgan, which first used the term, expects this debasement trade phenomenon to continue. Markets and investors are increasingly judging that governments burdened with excessive debt are less likely to restore fiscal soundness and preserve currency value. The real purchasing power of the dollar is down to 53% of its 2000 level.

◇Citi: "Bitcoin will reach 180,000 dollars by year-end"

Wall Street is eyeing Bitcoin as the next target after gold, which is up more than 50% this year. After a flat third quarter, cryptocurrencies began a sharp ascent in October. In the first week of October, 12 Bitcoin exchange-traded funds received a total inflow of 3.2 billion dollars. Short-term corrections are possible, but the sentiment has tilted bullish.

Citigroup raised its 12-month Bitcoin target to 181,000 dollars, calling it 'digital gold.' JPMorgan says Bitcoin is considerably undervalued compared to gold and sees upside to 165,000 dollars. Because Bitcoin's volatility relative to gold has fallen significantly, it has become a relatively more attractive investment than gold for investors. The current size of private-sector gold investment worldwide is about 6 trillion dollars, while Bitcoin's market capitalization is around 2.3 trillion dollars—so, accounting for volatility differences, there is an arithmetic argument that Bitcoin could rise about 42% more.

The mood is that gold will continue to rise for the time being. Goldman Sachs raised its year-end gold target from 4,300 dollars to 4,900 dollars.

Retail investors in the West are also rapidly increasing their holdings of gold ETFs. According to Goldman Sachs, Western gold ETF holdings rose by 112 tons in September alone—more than six times the expected amount. Until now, central banks in the anti-West world were driving gold purchases, but now Western retail investors have also begun buying gold as a hedge against currency decline. Peters said, "Don't stick only to traditional value stocks; a basic position should include AI and infrastructure-related assets, and real assets like gold and resources to defend against inflation."

New York—Correspondent Bin Nansae / Reporter Choi Mansu binthere@hankyung.com