Recently, there is an interesting phenomenon: gold and silver are soaring, while cryptocurrencies show little sign of improvement. This is no coincidence. The two are moving in completely opposite directions, fundamentally reflecting the huge differences in asset attributes and the current macro environment tearing apart. Precious metals are rising due to doubts about the credit system, while the crypto market is declining because investors are fearful of risk assets.

**Why can precious metals rise so strongly?**

This round of market movement far exceeds the short-term safe-haven behavior seen before. It actually signals deep changes happening in the global monetary system.

The first driver is the loosening of the dollar’s credit. After the geopolitical shocks in 2022, the value of gold was completely rewritten—it became a true “non-sovereign asset.” Central banks around the world began to aggressively swap into gold reserves and withdrew funds from traditional financial centers. This has built a long-term support wall for gold prices. More painfully, the US government’s fiscal policy has become increasingly aggressive, with frighteningly large deficits, directly damaging the credit foundation of the dollar. Against this backdrop, gold has shifted from an “interest-free asset” to a “hard asset safe haven.” Even rising US Treasury yields cannot stop the increase in gold prices.

The second factor is the reversal of interest rate expectations. The Federal Reserve has started a rate-cutting cycle, and the market is betting that this trend will continue. With the opportunity cost of interest-free assets decreasing, gold’s attractiveness to capital rises sharply. Coupled with expectations that real interest rates will decline—considering fiscal expansion, inflation, and resilience—long-term real yields are suppressed. At this point, holding gold, an asset with zero credit risk, becomes relatively more valuable.

**Why is cryptocurrency under attack?**

It’s simple. The logic in the crypto space is completely opposite to that of precious metals. Precious metals attract safe-haven funds, while crypto attracts funds with high risk appetite. When the market begins to contract risk appetite and avoids highly volatile assets, crypto is the first to be affected. Plus, macro policies are still in a period of adjustment, and liquidity conditions are not as loose as expected, so high-risk assets naturally give way.

**An obvious logical point**

These two phenomena are actually two sides of the same coin. The rise in precious metals indicates that the market is re-evaluating credit risk and exchange rate risk. Although the US dollar remains the strongest reserve currency, its “credit discount” is widening. Central banks’ actions to reduce holdings of US Treasuries and increase gold reserves will continue, providing a structural support for precious metals.

For the crypto market, short-term pressure indeed exists. But the long-term logic remains unchanged—the structural adjustment of global sovereign credit will ultimately rekindle investor demand for alternative assets. It’s just not the time yet.

The most important current focus is the actual policy implementation by the Federal Reserve, the pace of central banks’ gold purchases, and the evolution of the US fiscal deficit. These factors will determine when safe-haven funds will flow back into risk assets.