In 2025, the US Dollar Index fell nearly 9.5% over the year, marking its largest annual decline since 2017. By early 2026, markets experienced intense volatility: the precious metals sector saw its market capitalization swing by as much as $10 trillion in a single trading day, with gold plunging over 12% in one day and silver dropping more than 30% at one point.
Meanwhile, according to Gate market data, the price of Bitcoin changed by -11.16% over the past seven days. This simultaneous downturn has left investors puzzled: Has the "de-dollarization" investment thesis failed?
Market Turmoil: The Story Behind Synchronized Declines
Recently, global markets have presented a perplexing picture. Traditional safe-haven asset gold, Bitcoin—often dubbed "digital gold"—and US tech stocks have all experienced a rare, simultaneous decline.
According to the latest Gate market data, Bitcoin (BTC) is currently trading at $64,994.1, down 11.16% over the past seven days. At the same time, traditional safe-haven gold is also under pressure, now priced at $4,824.09/oz, down 2.05% in the past 24 hours.
This synchronized drop highlights a structural shift in the market: the traditional boundaries between major asset classes are becoming increasingly blurred.
Narrative Breakdown: Three Core Contradictions in the "De-dollarization" Thesis
The widely held "de-dollarization" narrative is being put to the test, with three core contradictions coming to the fore.
The dollar’s weakness is not a structural collapse. The dollar’s 2025 decline was primarily driven by a series of specific policy shocks, such as the "reciprocal tariffs" announced in April, whose impact the market has gradually digested. Once these short-term shocks are absorbed, the dollar’s fundamental strengths are likely to reassert themselves. The US still holds an advantage in interest rates. The current federal funds rate range is 3.50%–3.75%, significantly higher than the European Central Bank’s 2%, the Bank of Japan’s 0.75%, and the Swiss National Bank’s 0%. This rate differential continues to create demand for the dollar through carry trades and international asset allocation.
Diverging perceptions of safe-haven assets. Gold and Bitcoin hedge against different types of risk. Gold, as a traditional safe haven, is mainly used to guard against short-term event risks such as geopolitical conflicts or tariff wars. Bitcoin, on the other hand, is more of a hedge against long-term systemic risks like monetary expansion, fiscal deficits, and instability in reserve systems. This distinction explains why, during short-term risk events, gold is often bought while Bitcoin may be sold off.
A crowded market structure. "De-dollarization" trades have become one of the most crowded macro bets in 2026. When everyone is on the same side of a trade, the market becomes extremely fragile, and even minor shifts in direction can trigger cascading liquidations. This kind of extreme positioning creates risks that go beyond fundamentals.
Shifting Correlations: The Complex Relationship Between Bitcoin, Gold, and Equities
Asset correlations are undergoing subtle but significant changes, challenging traditional investment classification frameworks.
Lower correlation with traditional assets. Recent data shows that the 90-day return correlation between Bitcoin and both the S&P 500 Index and gold has approached zero. This indicates that Bitcoin is in a unique "decoupling" phase from gold and stocks—a situation not seen since late 2021. Stronger correlation with tech stocks. In contrast to its declining correlation with gold, Bitcoin’s correlation with tech stocks—especially the Nasdaq—has increased. This reflects a shift in institutional investor perception, with Bitcoin increasingly categorized as a "high-growth tech asset" rather than a traditional safe haven.
Volatility characteristics maturing. Since 2021, Bitcoin’s 180-day realized volatility has gradually declined and now stabilizes around 50%-60%. This level of volatility is comparable to many popular tech stocks, indicating that Bitcoin is maturing as an asset class.
Macro Mechanisms: Deep Drivers Behind the Market Reversal
Deeper forces are driving the market’s shift, going beyond short-term sentiment swings.
Changing expectations for monetary policy. The nomination of a new Federal Reserve Chair has become a major market catalyst. Kevin Warsh’s nomination signals a possible shift in the Fed’s policy stance. He is seen as the most hawkish among the candidates, advocating for balance sheet discipline and prioritizing inflation control. Even if Warsh ultimately does not implement tough policies, the mere "threat" of hawkishness is enough to disrupt expectations of "permanent easing." This shift in expectations directly challenges the crowded "devaluation trade."
US economic resilience underestimated. The US economy has continued to grow even after absorbing tariff shocks and enduring higher interest rates. In Q3 2025, real GDP grew at an annualized rate of 4.3%—the fastest pace since 2023. On the fiscal front, the US also holds a clear advantage. The federal deficit exceeds 6% of GDP, with an additional $350 billion in fiscal stimulus expected before the second half of 2026.
Structural flaws in alternative options. Capital fleeing the dollar has yet to find truly attractive large-scale alternatives. Europe remains mired in structural problems, and Japan’s policy mix fails to support a stronger yen. While gold and other precious metals briefly served as "pressure valves," last week’s sharp volatility exposed their vulnerability as safe-haven assets—crowded trades can be repackaged as safe havens, but remain fragile.
Crypto’s Role: Short-Term Liquidity Asset and Long-Term Systemic Hedge
The role of crypto assets is undergoing a dual transformation, which will significantly impact their future performance.
Short-term role: liquidity-sensitive risk asset. As rate-cut expectations are pushed back, the liquidity chain must be repriced, and risk assets are often the first to be affected. In the short term, Bitcoin’s market pricing acts more like a liquidity asset, closely tracking market liquidity expectations. Bitcoin has been absorbed into mainstream institutional asset pools and is now grouped with tech and growth stocks. This means that when institutions rebalance risk exposure, Bitcoin is now part of the "sellable assets" basket—a sign of its maturity as an asset class, but also a driver of its short-term volatility.
Long-term role: reserve option outside the system. Bitcoin’s long-term value proposition remains strong. The case for buying Bitcoin has never been "I need a safe haven today because of some event," but rather "the system has long-term issues, and Bitcoin provides a reserve option outside the system." As the global reserve system fragments and regions push forward with de-dollarization, the narrative of Bitcoin as an "outside-the-system" asset may actually be reinforced.
High internal correlation within the crypto market. The current crypto market exhibits a "follow the king" structure. When Bitcoin’s price retreats from its highs, sectors focused on DeFi, smart contracts, and computing tokens typically see declines of 20% to 25%. This lack of meaningful diversification means that strategies aiming to hedge Bitcoin risk by holding other tokens have limited effectiveness.
Silver token XAGUSDT on Gate fell 6.14% intraday, while gold token XAUTUSDT dropped 1.91%. The market balance is subtly shifting, and capital that once bet heavily on "the decline of the dollar" is starting to reassess its positions. While Bitcoin’s safe-haven narrative may temporarily recede amid short-term liquidity tightening, its long-term mission endures: to offer a value storage option beyond sovereign control in a world where the dollar is no longer the sole reserve and diversification is the new norm.
