Bitcoin and cryptocurrencies have rocketed higher this week as traders gear up for what could be an explosive 2026.
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The bitcoin price has topped $126,000 per bitcoin, hitting a fresh all-time high and climbing along with gold as the Federal Reserve weighs a game-changing decision.
Now, as the bitcoin and crypto “floodgates” open, the billionaire chief executive of Wall Street giant Citadel has issued a serious warning over the dollar’s role as a global safe haven.
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U.S. dollar collapse has seen the greenback lose around 10% of its value this year as traders bet on gold, bitcoin and other currencies—pushing the bitcoin price and gold to record highs.
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“We’re seeing substantial asset inflation away from the dollar as people are looking for ways to effectively de-dollarize, or de-risk their portfolios vis-a-vis U.S. sovereign risk,” Ken Griffin told Bloomberg.
“Gold is at record highs and the appreciation in dollar substitutes—in crypto, for example—is unbelievable.”
The bitcoin price has matched gold’s rally this year, with the pair surging as part of the so-called “debasement trade” that’s seen traders turn to hard assets like gold, silver and bitcoin as hedges against dollar debasement where money printing and inflation reduces purchasing power.
“Inflation is substantially above target 1759842572 and in all forecasts for next year,” Griffin said, pointing to inflation as one reason for the U.S. dollar’s 10% collapse in price this year—”the single biggest decline in the U.S. dollar over six months for 50 years.”
In late September, the Federal Reserve’s preferred inflation measure, the personal consumption expenditures index, showed prices climbed 2.7% year-over-year, hitting the consensus estimate but well above the Fed’s 2% target.
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The bitcoin price has rocketed to a fresh all-time high this week, rallying alongside the gold price as traders fret over the future of the U.S. dollar.
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The Fed is meanwhile predicted to cut interest rates again later this month after restarting its paused rate cutting-cycle last month in what some think could unleash a gold and bitcoin price surge.
Markets are pricing in a 92% chance of a 25 basis point cut at the next meeting for October 29, which would lower the federal funds rate to a range of 3.75%–4.00%, according to the CME FedWatch Tool.
Additional cuts are expected before the end of the year, bringing interest rates down to between 3.50% and 3.75% and freeing up money that could be invested in risk assets.
“A surge of distrust in fiat currencies, or so-called currency debasement trade, has sent gold to new records,” Alex Kuptsikevich, FxPro chief market analyst, said in emailed comments.
“Concerns about the growth of public debt are forcing investors to insure against the risks of financial instability. They are buying precious metals as safe-haven assets and bitcoin as digital gold.”