Gold and Bitcoin surge as inflation fears push investors toward safe-haven assets

Rising inflation and global economic uncertainty are driving investors toward assets like gold and Bitcoin, pushing both to new highs.

Gold climbed to an all-time high above $4,200 per ounce on Wednesday, fueled by strong demand from retail buyers and central banks seeking protection from currency debasement. Reports from Nightly News in Sydney showed long queues outside the ABC Bullion store, where people were buying physical gold as a hedge against declining trust in the financial system.

Many customers cited growing concerns over the falling U.S. dollar, economic instability, and doubts about traditional banking as reasons for turning to gold. According to Yahoo Finance, gold’s price has risen nearly 61% year-to-date, reflecting a global shift toward tangible stores of value.

Economist Mohamed El-Erian noted that in August, gold surpassed U.S. Treasurys as a share of central bank reserves for the first time since 1996. Gold now makes up over 25% of worldwide central bank holdings, marking a major shift in monetary strategy.

This movement mirrors a wider trend toward safe-haven assets. Analysts at The Kobeissi Letter highlighted that “Gold, Silver, and Bitcoin are now all among the top 10 largest assets in the world.” These assets tend to rise when traditional markets weaken.

The U.S. dollar, meanwhile, is on track for its worst year since 1973, as both Bitcoin (BTC) and gold hit record highs. Analysts say declining trust in fiat currencies and financial institutions continues to strengthen the appeal of hard assets like Bitcoin..

Bitcoin’s volatility remains under debate

Bitcoin, often described as “digital gold,” shares many of gold’s characteristics — a capped supply and resistance to censorship — but remains far more volatile. Bitcoin’s $2.2 trillion market cap is still smaller than gold’s $2.9 trillion, meaning its price swings more sharply when large trades occur.

Following last Friday’s massive market crash, Bitcoin fell 8.8%, while several altcoins lost more than 95% of their value within 24 hours. Despite this, many analysts still see Bitcoin’s long-term store-of-value potential as inflation and monetary uncertainty continue to dominate global markets.

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