Gold, Silver and Bitcoin Tumble as Debasement Trade Unwinds

Gold, silver, and bitcoin have all tumbled from their January 2025 highs, as the so-called debasement trade rapidly unwinds amid expectations of tighter monetary policy under new Federal Reserve Chair Kevin Warsh.

Gold has fallen roughly 28% from its January peak of $5,600, now trading below $4,000 per ounce. Silver has dropped more than 50%, slipping beneath $59 per ounce. Bitcoin has also suffered significant losses, though the exact percentage was not specified in the report. The sell-off is driven by growing fears that the Fed under Warsh will prioritize fighting inflation, with markets pricing in two 25 basis point rate hikes by March 2027, lifting the federal funds rate to 4.00%-4.25%.

For cryptocurrency traders, this shift in macro backdrop is critical. The debasement trade—buying hard assets like gold, silver, and bitcoin as hedges against currency devaluation—had been a dominant narrative in 2025. Now, with rate hikes on the horizon, the opportunity cost of holding non-yielding assets like bitcoin increases, and risk appetite shrinks. Traders can monitor the ongoing price action on NowPrice's live crypto dashboard to track bitcoin's response to these macro headwinds.

Looking ahead, all eyes will be on upcoming Fed communications and inflation data. If the Fed signals further tightening, the sell-off in gold, silver, and bitcoin could deepen. Conversely, any dovish surprise might spark a relief rally. The key levels to watch are gold's $4,000 support and bitcoin's recent lows, as a break below could accelerate losses.