Bitcoin, once touted as digital gold, is floundering as gold and silver rocket to record highs and traders brace for a Federal Reserve game-changer.
Sign up now for CryptoCodex—A free crypto newsletter that will get you ahead of the market
The bitcoin price is struggling to hold onto support levels around $88,000, down from a peak of $126,000 in October last year, and fueling fears another sell-off could be coming as sentiment plummets into the “extreme fear” zone.
Now, just after billionaire investor Ray Dalio sounded the alarm over the future of the U.S. dollar, another U.S. government shutdown could be about to pile on even more pressure as gold tops $5,000 per ounce and silver breaks $100—leaving some asking, “Where is bitcoin?”
Sign up now for the free CryptoCodex—A daily five-minute newsletter for traders, investors and the crypto-curious that will get you up to date and keep you ahead of the bitcoin price and crypto market swings
The U.S. dollar is has fallen sharply, sparking fears of a crisis and the end of the dollar era as gold and silver soar, leaving the bitcoin price in the dust.
Getty
“The dollar era is ending,” declared Balaji Srinivasan, former Coinbase chief technology officer and founder of the bitcoin and crypto-supporting Network State, on X, describing the “escalating sovereign debt crisis, and the devaluation of the dollar against gold and digital gold,” as an “apocalypse”
“The first step is to accept that the apocalypse is now,” Srinivasan wrote.
Last week, falling U.S. bond prices that sent yields spiking were described as the “sell America” trade, but within “a much broader global risk off,” by Krishna Guha, head of global policy and central banking strategy at Evercore ISI, in a note to clients seen by CNBC.
The U.S. dollar has fallen toward levels not seen since 2022, according to the Bloomberg Dollar Spot Index.
“Talk of a sudden dollar collapse … is overstated, but it reflects a real loss of confidence,” Kurt Hemecker, chief executive of Gold Token S.A., precious metal giant MKS PAMP’s gold tokenization arm, said in emailed comments, adding that “rising debt, fiscal strain, and policy uncertainty are pushing investors to look beyond fiat for long-term stability.”
This week’s latest dollar downturn comes amid speculation that U.S. officials could join their counterparts in Japan in intervening to support the currency.
The Federal Reserve Bank of New York checked in with traders about the yen’s exchange rate, according to a Bloomberg report, pushing the yen up more than 1% to its strongest level since November, while Japan’s prime minister Sanae Takaichi warned the country “will take all necessary measures to address speculative and highly abnormal movements.”
The dollar was last trading at these levels compared to a basket of other major currencies in September last year, just before the historic U.S. government shutdown.
Lawmakers are now scrambling to avert another shutdown, with Friday the latest deadline for the passage of a new funding bill. However, the odds of another shutdown have spiked to around 75% on the Kalshi prediction platform just months after last year’s record-breaking funding deadlock.
Flight from the U.S. dollar has added to the huge gold and silver price rally, which has so far failed to spread to bitcoin.
Sign up now for CryptoCodex—A free crypto newsletter that will get you ahead of the market
The bitcoin price has failed to recover from a steep sell-off last year, languishing at under $90,000 per bitcoin even as gold and silver hit record highs.
Forbes Digital Assets
“Where is bitcoin,” analysts with the Kobeissi Letter posted to X. “The world is waiting on crypto.”
The bitcoin price has traded sideways since it took a big step down in November, dropping under the $100,000 per bitcoin level.
“In the past, prominent greenback sell-offs have acted as a catalyst for crypto price breakouts, with a similar fall in 2017 kicking off a historic bull market,” Nic Puckrin, investment analyst and cofounder of Coin Bureau, said in emailed comments.
“However, with ongoing macro uncertainty, fears over another U.S. government shutdown, and prevailing expectations of a rate cut pause from the Federal Reserve, there are few external catalysts that could drive this reversal.”
