This post was originally published on this site.
01/29 update below. This post was originally published on January 28
Bitcoin and crypto prices have been left in the dust by gold’s huge rally over the last year (though a massive shock is expected in 2026).
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The bitcoin price has dropped under the closely watched $90,000 per bitcoin level as crisis engulfs the U.S. dollar.
Now, with traders braced for a Federal Reserve game-changer, a “crisis of confidence” in the U.S. dollar has been predicted to see bitcoin catch up with gold.
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“There’s a crisis of confidence in the U.S. dollar,” Kyle Rodda, a senior market analyst at Capital.com, said in comments reported by Reuters. “It would appear that while the Trump administration sticks with its erratic trade, foreign and economic policy, this weakness could persist.”
01/29 update: The soaring price of gold and silver—which have both reached fresh all-time highs this week as the U.S. dollar falls—have been described as a warning light that heralds a massive economic crisis.
“Gold and silver are warning about a bigger crisis that’s gonna hit either later this year or maybe next year. We are headed for a U.S. dollar crisis and a sovereign debt crisis,” economist and gold investor Peter Schiff told Fox Business, pointing the spiraling $38 trillion U.S. debt pile and the dollar’s slump into 2026.
“Central banks are buying gold to back up their currencies. They’re getting rid of dollars. They are getting rid of Treasuries. We are headed for [an] economic crisis, again, that will make the 2008 financial crisis look like a Sunday school picnic.”
Fears have been swirling for years that the era of U.S. dollar reserve currency status could be coming to an end, with the turmoil triggered by U.S. president Donald Trump’s global trade tariffs and the rise of China as a economic challenger to the U.S. stoking those fears.
“We have a dysfunctional consumer-based credit economy that rests on the foundation of the U.S. dollar’s reserve currency status, and the world is now pulling the rug out from under the U.S. The dollar’s going to collapse. The dollar is going to be replaced by gold,” Schiff said.
Meanwhile, bitcoin, which had been touted as a digital version of gold that some predicted could fill the gap left by the U.S. dollar, as cratered, dropping more than 30% from its October high and analysts predicting bitcoin won’t recover until the Federal Reserve turns dovish.
“Remarkably, bitcoin is weakening even as the U.S. Dollar Index hovers at levels not seen since 2022,” Samer Hasn, Senior Market Analyst at XS.com, said via email.
“This divergence points to a structural sentiment shift where investors prefer the 30% and 65% year to date gains in gold and silver over the uncertainty of digital assets. This flight to safety is bypassing bitcoin entirely in favor of tangible commodities. Until the geopolitical dust settles or the Fed turns the liquidity taps back on, bitcoin remains a high-risk play in a world looking for a bunker.”
Others warned that bitcoin could continue to be “sidelined” in favor of other, better performing assets.
“Previously, bitcoin has been viewed as a hedge against dollar debasement. But it has failed to match the upside momentum in both gold and silver,” David Morrison, senior market analyst at Trade Nation, said in emailed comments.
“The steady-policy message from the Fed has calmed currency volatility but has also left crypto sidelined as investors prioritise assets with clearer momentum.”
This week, U.S. president Donald Trump said the dollar was “great” despite it heading for its steepest weekly decline since last April’s “Liberation Day” market turmoil.
Trump’s comments were taken by the market as a signal that dollar selling could intensify ahead of the Federal Reserve’s Wednesday interest rate decision.
“When the person who could jawbone to defend the currency sounds unconcerned, the perceived backstop under the dollar gets thinner,” Anthony Doyle of Pinnacle Investment Management said in comments reported by Bloomberg.
“This may very well be the beginning of the next leg lower in the dollar, and many may not be prepared for it,” added Stephen Jen, founder of Eurizon SLJ Capital.
The fall in the U.S. dollar pushed the price of gold and silver to fresh all-time highs, while bitcoin, which has tried to carve out a reputation as digital gold, remains on the sidelines.
“With U.S. debt levels likely to rise further into the midterm election cycle, as Trump pushes targeted stimulus under a renewed affordability agenda, foreign investors are likely to continue diversifying away from the U.S. dollar,” Markus Thielen, the chief executive of 10X Research, said in an emailed note that described the U.S. dollar as “breaking” and pointing to China beginning to relax its negative attitude toward bitcoin and crypto.
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Forbes Digital Assets
“Gold has been the primary beneficiary of this shift so far, but over time, bitcoin should also benefit, particularly if alternative reserve assets such as gold and silver become increasingly crowded and expensive.”
The bitcoin price has failed to end its downward spiral so far into 2026, though long-term bitcoin price bulls remain confident it will do so eventually.
“While bitcoin’s technical structure remains weak for now, the macro forces taking shape could carry far-reaching implications once a catalyst emerges,” Thielen added, referring to a “larger story is quietly developing in the background. When that spark is finally triggered, the repricing may not be gradual.”