Investors rush to Bitcoin and gold as confidence in fiat currencies erodes

A powerful wave of investor anxiety over mounting fiscal deficits and currency erosion is propelling both gold and Bitcoin to historic highs, as the so-called "debasement trade" gains momentum across global markets.

- Issac John [e-mail]

With its fixed supply of 21 million coins, Bitcoin offers an algorithmic scarcity that appeals to investors disillusioned with central bank policies of perpetual expansion. -- REUTERS FILE

(REUTERS FILE)

The shift marks a dramatic reallocation of capital from fiat currencies particularly the US dollar - into scarce, non-sovereign assets perceived as safer stores of value.

At the heart of this narrative is Ken Griffin, CEO of Citadel, who has warned that the US economy is running on a “sugar high” of excessive fiscal stimulus and debt accumulation. Griffin's comments, echoing growing institutional unease, suggest that investors are increasingly questioning the long-term credibility of the dollar as inflation stays stubbornly above target and US debt surpasses $35 trillion. “Investors are de-risking from sovereign exposure and moving to hard assets a classic debasement trade,” Griffin said, describing it as an “inflection point for global finance.”