Bitcoin and gold have split in recent months as gold soars and the bitcoin price plummets—with U.S. president Donald Trump’s tariff trade war again threatening to weigh on the U.S. dollar.
Sign up now for CryptoCodex—A free crypto newsletter that will get you ahead of the market
The bitcoin price has fallen sharply overnight, dropping from almost $96,000 per bitcoin to just over $90,000 in a matter of minutes, while gold hit a fresh all-time high after Trump threatened to escalate tariffs on eight Nato allies unless Denmark agreed to a deal for Greenland.
Now, as Bank of America’s chief executive issues a stark $6 trillion crypto warning, traders are braced for this week’s inflation reading to be higher than previously expected—triggering warnings of “unprecedented stagflation.”
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
U.S. Federal Reserve chair Jerome Powell grappled with the so-called debasement trade that boosted gold and the bitcoin price last year.
Getty Images
Economists at Barclays and Morgan Stanley have increased their December U.S. personal consumption expenditures price index (PCE) forecasts to 2.8% or 2.9%, while BNP Paribas’s Andy Schneider wrote in a note seen by Reuters that the reading will be “significantly” higher than last week’s 2.7% consumer price index (CPI).
The latest PCE data, the Federal Reserve’s preferred measure of inflation that excludes volatile food and energy prices, will be released on Thursday, potentially reviving fears of so-called stagflation that sees sluggish economic growth combined with soaring prices.
“A coming collapse in the dollar will send consumer prices soaring,” Peter Schiff, a gold investor who is typically bearish on the dollar and critical of bitcoin, posted to X. “Get ready for unprecedented stagflation.”
Ahead of the latest inflation reading, the U.S. dollar has weakened as last year’s so-called debasement trade—which saw investors bet against the dollar and pile into scarce assets like bitcoin, gold, silver and copper alongside stocks—returned.
Sign up now for CryptoCodex—A free crypto newsletter that will get you ahead of the market
The bitcoin price rally this year has been threatened by the latest Trump trade war that’s also hit the U.S. dollar and boosted gold.
Forbes Digital Assets
“President Trump’s fresh tariff threat to his trading partners and Nato allies over Greenland led to a U.S. dollar selloff,” David Morrison, senior market analyst at Trade Nation, said in emailed comments. “The Dollar Index snapped sharply lower to trade back under 99.00, having hit a six-week high at the end of last week.”
Gold and silver have both hit record highs as the U.S. dollar declined, with David Wilson, director of commodities strategy at BNP Paribas, telling Bloomberg that gold at $5,000 per ounce “looked like a big target” not that long ago, but is now within sight.
Meanwhile, traders are betting bitcoin price weakness continues due to the geopolitical uncertainty weighing on risk appetite.
“From here, it’s likely we’ll see further downside unless buyers step in, with strong support around $88,000,” Nic Puckrin, digital asset analyst and co-founder of the Coin Bureau, said in emailed comments, adding “the uncertainty and fears around Greenland are likely to get worse before they get better.”