Gold And bitcoin have traded at record highs as investors seek protection in what is typically a volatile October for the market.
Rising inflation and debt, a weakening US dollar, the government shutdown and Wall Street's latest buzz, the debasement trade, have all boosted assets, along with stocks and bonds.
“This whole humiliating trade benefits gold,” Christian Magoon, CEO of Amplify ETFs, said this week on CNBC's “ETF Edge.”
The Federal Reserve's fight against inflation and rising government debt have increased investor concerns about long-term currency stability. According to Treasury Department budget data, U.S. gross federal debt is about $3.7 trillion as of early October. The US dollar index (DXY) is down about 8% since the beginning of the year.
Both gold and bitcoin are treated as safe havens in a market shaped by inflation and policy risks. Gold rose above $4,000 for the first time on Tuesday and reached a record high. The precious metal continues to rise as uncertainty fuels it. Bitcoin joined gold in the debasing trade as a digital alternative to traditional currencies. The cryptocurrency broke just over $126,000 early this week, setting a new all-time high.
The so-called 'debasement trade' is a bet that government bonds and money printing will erode the value of the US dollar, prompting more and more investors to flee en masse to safe havens.
“Inflation is substantially above target and substantially above target in all forecasts for next year. It's part of the reason the dollar has depreciated,” Citadel CEO Ken Griffin told Bloomberg on Monday. “Gold is at record highs and the appreciation for other dollar substitutes… in things like crypto for example is incredible.”
Performance of Gold and Bitcoin ETFs in 2025.
The move for gold did not come out of nowhere. It has now surpassed the performance of all major US stock market indexes this year, and over the past one- and three-year periods.
Gold continues to attract steady inflows, while silver has risen about 66% since the start of the year, with the metal rising to $50 on Thursday, an all-time high.
“We see silver moving from the high 40s to the 60s over the next 12 months,” Magoon said on “ETF Edge.”
“We are in the sixth year of tight supply and silver trends are only becoming more bullish for silver from an industrial perspective,” he added.
October is historically the most volatile month of the year on Wall Street, and Jay Jacobs, BlackRock's head of equity ETFs says he's seeing many clients repositioning their portfolios and switching to global monetary alternatives. Jacobs told CNBC's “ETF Edge” this week that some traders are looking for non-sovereign assets that behave differently than stocks and bonds, including gold, silver and cryptocurrencies. “People are looking for assets that live outside the traditional system. That can be a bit of a portfolio,” Jacobs said.
said Jacobs SPDR Gold Trust (GLD) And iShares Gold Trust (IAU) remain heavyweight options for gold exposure. In the meantime, iShares Silver Trust (SLV) is a go-to for silver, and iShares Bitcoin Trust (IBIT) is seeing interest from those who want regular exposure.
The bitcoin ETF also recently beat the largest US stock ETFs in weekly flows.
Billionaire hedge fund manager Paul Tudor Jones told CNBC's “Squawk Box” on Monday that he would own a combination of gold, cryptocurrencies and Nasdaq technology stocks between now and the end of the year, looking to capitalize on the rally fueled by the “fear of missing out.”
Jones rose to fame after predicting and profiting from the 1987 stock market crash.
“The bear markets are tough,” Magoon said. “This is a way to hide or make a profit in times of uncertainty,” Magoon said.
But he also added that “bull markets often crawl along a 'wall of worry'. It looks like one of these 'walls of worry' will disappear, and we will, I think, have a good fourth quarter.”
Stocks fell sharply on Friday as a new risk emerged amid rising tensions between the US and China over rare earths, with President Trump threatening “massive” new tariffs.
Jacobs said on “ETF Edge” earlier this week that there is strong momentum going forward and heading into 2026, including excitement around corporate earnings and optimism around possible rate cuts by the Federal Reserve.
According to Fed minutes released Wednesday, policymakers were almost unanimous in their view that the central bank should cut rates because of weakness in the labor market, but disagreed on whether there should be two or three cuts in total this year, including the quarter-percentage point cut approved at last month's meeting.
Jacobs said there are reasons why the hot trades outside of stocks and bonds continue. “As we continue to see geopolitical uncertainty and inflation uncertainty, people are looking for assets that live outside the traditional system,” he said.
View the full ETF Edge episode to learn more about how investors use ETFs to manage market volatility.
