According to external sources, the recent weakness of bitcoin is not due only to the internal factors of the encrypted market. As the Fed releases stronger policy signals, the dollar goes up, and gold and silver go down in parallel, the “anti-depreciation” deal, which was once pursued by the Fed together, is retreating, and bitcoin is being dragged back.
The Fed has turned to suppressing interest-free assets.
According to the article, gold, silver and bitcoin had previously been seen as scarce assets, benefiting from market concerns about fiscal expansion, rising debt and declining purchasing power of banknotes. As a result, funds flow to such assets that cannot be increased at will.
But this logic is being reversed. The new Fed Chairman, Kevin Warsh, released the Eagle signal at the first meeting, and the market is now taking into account the expected increase in interest rates to 25 basis points in the first two months of March 2027, corresponding to the interest rate of the Federal Fund, or to 4.00 per cent to 4.25 per cent. At the same time, the United States dollar rose by about 0.8 per cent this week.
Higher real interest rates raise the opportunity cost of holding interest-free assets. For overseas buyers, a stronger dollar would also increase the cost of purchasing gold, silver and bitcoin. This places the three types of assets under pressure.
Gold and silver are back in sync with bitcoin.
According to the data cited in the article, the price of gold fell for the first time since last November, to $400,000, more than half of the higher value of silver, and bitcoin to about $58,000.
In the longer term, gold fell by about 28 per cent above its record level of close to $5,600 in January 2025, silver fell by 50 per cent over its level of close to $120, and bitcoin fell by about 50 per cent over last October.
According to the article, this was not an independent decline in several types of assets, but the same macro transaction was at a level of concentration. They had previously been placed in the same basket because of “currency devaluation transactions” and are now falling back under the same logic.
Bitcoin is still swaying between the two roles.
However, the relationship between Bitcoin and precious metals is not entirely consistent. The article mentions that, during most of 2025, when gold and silver continued to rise, Bitcoin was in the vicinity of $100,000, lagging behind precious metals. It also allowed the market to revisit whether bitcoin was still seen as an asset for a hedge currency devaluation.
But what is more detrimental at the moment is that bitcoin, while not fully following precious metals at the upswing stage, is closer to its trajectory. The article also mentioned that Bitcoin had fallen to a 200-week mean line near approximately US$ 60,000, a position usually considered a long-term observation indicator.
Nevertheless, bitcoin is not unresistible relative to precious metals. According to the article, since February this year when the relevant margin was at its bottom, bitcoin has risen by about 30 per cent relative to gold and by over 55 per cent relative to silver. This means that it still has both risk assets and “hard currency” narratives.
According to the article, as long as the Fed maintains its hawk position and the United States dollar remains strong, bitcoin may still find it difficult to escape from the downswing with gold and silver.