Why Market Wall of Worry, Devaluation Trade Is Fueling Gold and Cryptocurrency

Gold AND bitcoins quotations have hit record highs as investors seek protection in a typically volatile October market.

Rising inflation and debt, a weakening US dollar, a government shutdown and the latest hype on Wall Street,degrading trade”, they all increased assets beyond stocks and bonds.

“All this devaluation trading is benefiting gold,” Amplify ETF CEO Christian Magoon said this week on CNBC’s “ETF Edge.”

The Federal Reserve’s fight against inflation and rising national debt have increased investor concerns about the currency’s long-term stability. As of early October, the United States’ gross federal debt is approximately $3.7 trillion Fiscal data from the State Treasury. The US Dollar Index (DXY) has decreased by approximately 8% since the beginning of the year.

Both gold and bitcoin are considered safe havens in a market shaped by inflation and political risk. Gold first appreciated it surpassed $4,000 on Tuesday, reaching an all-time high. The precious metal continues to gain in value, fueled by uncertainty. Bitcoin has joined gold in the devaluation trade as a digital alternative to traditional currencies. Earlier this week, the cryptocurrency topped just over $126,000, setting a new all-time high.

The so-called “devaluation trade” is a bet that government borrowing and money printing will lower the value of the US dollar, causing more investors to flee to safe assets.

“Inflation is well above target and well above target in all forecasts for next year. This is one reason for the depreciation of the dollar,” said Citadel CEO Ken Griffin. Bloomberg Monday. “Gold is at record highs and the appreciation of other dollar substitutes… things like cryptocurrency, for example, is incredible.”

This move didn’t come out of nowhere in the case of gold. Currently, since the beginning of the year and in the last one and three-year periods, it has improved the results of all major US stock market indices.

Gold continues to attract steady inflows silver has gained about 66% since the beginning of the year, in the case of the precious metal goes up to $50highest level ever on Thursday.

“We see silver rising from the high 40s to the low 60s over the next 12 months.” – Magoon said on “ETF Edge.”

“This is the sixth year of tight supply and silver trends are becoming more optimistic from an industrial perspective,” he added.

October is historically the most volatile month on Wall Street, and Jay Jacobs, CzarnyRockdirector of equity ETFs, says he sees many clients repositioning their portfolios to global cash alternatives. Jacobs told CNBC’s “ETF Edge” this week that some investors are looking for non-sovereign assets that behave differently than stocks and bonds, including gold, silver and cryptocurrencies. “People are looking for assets that are outside the traditional system. It can be a bit of a portfolio,” Jacobs said.

Jacobs said Gold Trust SPDR (GLD) AND iShares Gold Trust (IAU) remain heavyweight options with gold exposure. Meanwhile, iShares Silver Trust (SLV) is the favorite for silver and Ishares Bitcoin Trust (go) observes interest from those who want regular exposure.

The Bitcoin ETF has also recently been beating the largest U.S. ETFs in weekly flows.

Billionaire hedge fund manager Paul Tudor Jones told CNBC’s “Squawk Box” on Monday that he will hold a combination of gold, cryptocurrency and Nasdaq tech stocks between now and the end of the year to take advantage of growth fueled by “fear of missing out”

Jones rose to fame after predicting and profiting from the 1987 stock market crash.

“The bear market is tough,” Magoon said. “It’s a way to hide or profit in times of uncertainty,” Magoon said.

However, he also added that “it often happens that a bull market climbs a ‘wall of worries.’ “It looks like one of these ‘walls of worries’ will dissipate and we’ll have, I think, a good fourth quarter.”

Stocks fell sharply on Friday as new risks emerge amid rising tensions between the U.S. and China over rare earths President Trump Threatens ‘Massive’ New Tariffs.

Jacobs said earlier this week on “ETF Edge” that there is a lot of momentum going forward and into 2026, including enthusiasm about corporate earnings and optimism about potential Federal Reserve rate cuts.

According to Fed Minutes released Wednesday, policymakers were almost unanimous that the central bank should cut interest rates because of weakness in the labor market, but they disagreed on whether there should be two or three total cuts this year, including the quarter-percentage-point cut approved at last month’s meeting.

Jacobs said there are reasons why trades remain hot beyond stocks and bonds. “If we continue to see geopolitical uncertainty, inflation uncertainty, people will look for assets that live outside the traditional system,” he said.

Watch full episode of ETF Edge for more information on how investors use ETFs to manage market volatility.