The "default" plan of Bitcoin has failed, and gold is strongly targeting the dollar—upon seeing this news, my first reaction was: the opportunity to short the dollar has really arrived!
Why do I say that? Let’s start with Bitcoin.
The so-called "default" plan refers to the market's fantasy that Bitcoin can, in some sense, replace the dollar and become a global reserve asset. However, recent signs indicate that although the value volatility of Bitcoin has significantly decreased, it still cannot shake off the label of "high volatility, high risk," especially when geopolitical situations and global market sentiments change dramatically. Bitcoin has not yet become a truly safe-haven asset.
Don’t get me wrong, this doesn’t mean Bitcoin is useless; rather, it means that in the short term, it cannot shake the dollar's hegemony. To put it simply, Bitcoin is more like a magnifying glass for market sentiment. Once the Federal Reserve adjusts its policies and the dollar fluctuates, Bitcoin will be more sensitive than gold.
Why is gold targeting the dollar?
Gold's recent performance has been remarkable, and this is no coincidence. With expectations of the Federal Reserve cutting interest rates in December rising, the dollar index has shown signs of weakness, while gold has played the role of "real currency." When people are worried about the depreciation of the dollar and a return to loose monetary policy, gold naturally becomes the first choice for safe-haven funds.
If you haven't understood yet, this wave of market movement is actually a cycle:
• Weak dollar → Strong gold → Funds flowing out of dollar assets → Accelerating the decline of the dollar.
• Gold not only targets the dollar but has also become the "new favorite" in the U.S. Treasury market, with many countries replacing dollar reserves with gold reserves.
Where is the opportunity to short the dollar?
This is the key point. The strong cycle of the dollar is gradually peaking, and the reason is simple:
1. The Federal Reserve is shifting towards easing: interest rates have peaked or are even starting to decline, reducing the dollar's attractiveness.
2. Accelerating de-dollarization: more and more countries are attempting to settle in local currencies, with gold reserves surging, directly impacting the dollar's status as a global currency.
3. Changing market consensus: the dollar is gradually yielding its position as the preferred safe haven to gold and other assets, especially in times of increasing geopolitical risks.
From an investment perspective, shorting the dollar is not just about "hedging risks"; it is also a bet on the reallocation of global assets. Gold, the renminbi, and even Bitcoin could all share in the gains in this process.