CMC News

Bitcoin Hits $125K All-Time High as Dollar Crashes to 1973 Lows

$BTC surged to a new all-time high above $125,000 on Saturday while the U.S. dollar faces its worst annual performance since 1973, signaling a major macroeconomic shift according to analysts at The Kobeissi Letter.

The #S&P 500 has climbed over 40% in the last six months as gold trades near $4,000 per ounce, both hitting record levels. This unusual correlation between safe-haven assets and #risk assets indicates markets are pricing in a new monetary policy environment, Kobeissi Letter analysts noted.

The correlation coefficient between gold and the S&P 500 reached a record 0.91 in 2024. Both markets are moving in the same direction 91% of the time, a historically unusual pattern that suggests investors are rushing into all asset classes simultaneously.

The U.S. dollar is down over 10% year-to-date and has lost 40% of its purchasing power since 2000. The Federal Reserve is cutting rates into 4.0% annualized #inflation, a combination that has not occurred since the 1990s, creating conditions that favor alternative stores of value.

A U.S. government shutdown, massive downward revisions to jobs numbers, and growing concerns over dollar erosion all contributed to $BTC's rally.

These macroeconomic factors have renewed investor interest in #Bitcoin as a store-of-value monetary technology, according to Fabian Dori, chief investment officer at digital asset bank Sygnum.

Political dysfunction stemming from the #shutdown has pushed investors toward decentralized assets as faith in traditional institutions weakens. The government shutdown that began Wednesday forced regulatory agencies to operate on minimal budgets and skeleton staff, disrupting normal operations.

$BTC now holds a market value of $2.5 trillion, while gold stands at $26.3 trillion, and silver has surged over 60% this year to $2.7 trillion.