The financial world is abuzz with activity as the “debaser trade” takes center stage, highlighting a robust interest in assets perceived as hedges against inflation. Bitcoin and gold, often seen as the stalwarts of this trade, have been making headlines with their impressive performance, pushing them to the top of trading volumes in the exchange-traded fund (ETF) market.
Bitcoin and Gold: Rising Stars
Bitcoin, the leading cryptocurrency, has been flirting with its all-time high, currently trading over $120,000. It’s a mere whisper away from its peak of $124,000, a milestone that seems within reach given the current momentum. Meanwhile, gold has been enjoying an impressive run, with prices soaring nearly 50% year-to-date. It’s trading just shy of $3,900 and setting new record highs almost daily, underscoring its appeal as a safe haven in tumultuous times.
ETF Enthusiasm
The enthusiasm for these hard assets is mirrored in the ETF market, where both BlackRock’s iShares Trust (IBIT) and the SPDR Gold ETF (GLD) have captured significant attention. On a recent Thursday, these ETFs ranked among the top 10 most traded, a noteworthy feat. The GLD, in particular, saw a staggering $4.88 billion in volume, securing its position as the fourth most traded ETF. Close behind was IBIT with $3.21 billion, coming in at seventh place. Meanwhile, the SPDR S&P 500 ETF (SPY) topped the list with over $26 billion in volume, showcasing the diverse interests of investors.
Eric Balchunas, a Senior ETF Analyst at Bloomberg, commented on the phenomenon, noting, “Everyone wants in on the debaser trade, I guess.” His remarks reflect a growing sentiment that the debasement trade is more than just a trend; it’s becoming a significant part of the investment landscape.
The Sound Money Appeal
Comedian and sound money advocate Dominic Frisby weighed in on the situation, offering a perspective that resonates with many investors. “Bitcoin’s within a couple of percent of all-time highs. Gold’s at all-time highs. Silver’s closing in on all-time highs. It’s almost as though people are losing faith in fiat,” Frisby remarked in an exclusive interview with CoinDesk. His observations highlight a growing skepticism towards traditional currencies and a renewed interest in assets that are immune to government intervention.
Frisby’s comments underscore a broader sentiment within the market: that the perceived stability of fiat currencies is waning, prompting investors to seek refuge in assets like bitcoin and gold. This shift in sentiment is fueling the debaser trade and driving the impressive performance of these assets.
Silver’s Surge
Silver, often seen as gold’s less glamorous cousin, has also been making significant strides. Currently trading just below $48, silver is at its third-highest level, trailing only its peaks in 2011 and 1980. Intriguingly, these peaks coincided with gold’s top during those years, suggesting a historical pattern that could be playing out once again.
If history is any guide, silver’s current rally might herald further gains for gold and potentially bitcoin. The interconnected nature of these assets means that movements in one can often signal broader trends across the board, offering investors insights into potential future developments.
A Balanced Perspective
While the current market dynamics are undeniably exciting, it’s essential to maintain a balanced perspective. The rapid rise in prices and volumes can lead to volatility, a factor that investors should always consider. Moreover, while the debaser trade is gaining traction, it’s crucial to remember that market trends can shift rapidly.
Investors should weigh the potential risks and rewards carefully, ensuring that their portfolios are well-positioned to weather any market fluctuations. The allure of bitcoin and gold is undeniable, but prudent investment strategies remain key to long-term success.
Looking Ahead
As the debaser trade continues to capture the imagination of investors worldwide, the coming months promise to be an exciting time in the financial markets. Whether you’re a seasoned investor or a newcomer to the space, the current landscape offers a wealth of opportunities and challenges.
Bitcoin, gold, and even silver are all enjoying their moment in the sun, driven by a combination of market dynamics and shifting investor sentiment. As the debaser trade unfolds, keeping an eye on these developments will be crucial for anyone looking to navigate the complex world of finance in 2025.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
