That scenario undermines the assumption that an era of cheap money is close at hand. For Bitcoin, whose bullish narrative has leaned heavily on falling inflation and faster rate cuts, the timing now looks far less certain. As inflation risks rebuild, the Federal Reserve’s room to ease policy appears increasingly constrained.

Inflation Pressures Are Re-Emerging

According to the analysis, several structural forces are resurfacing. Tariffs introduced during the Trump administration, tighter labor markets, and persistent fiscal deficits are regaining influence. Crucially, the authors argue that importers have not yet fully passed tariff-related costs on to consumers.

Posen and Orszag estimate that this delayed cost pass-through could be largely completed by mid-2026. When it is, headline inflation may receive an additional 50 basis point boost. At the same time, immigration policies and widening budget gaps risk offsetting productivity gains linked to artificial intelligence.

Bitcoin and Bonds Face the Same Constraint

Rising Treasury yields reinforce this message. The U.S. 10-year yield recently climbed to 4.31%, its highest level in five months, reducing the appeal of risk assets. Analysts at crypto exchange Bitunix warn that easing policy before structural inflation pressures clearly subside could force a sharper adjustment later.

Bitcoin bulls continue to price in aggressive rate cuts. However, inflation that remains near or above 4% weakens that thesis. As borrowing costs stay elevated, liquidity-driven rallies become harder to sustain.

At this stage, the core risk is not price alone but timing. If inflation fails to cool as expected, the recovery narrative for crypto assets may be delayed rather than denied.

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Current market data shows gold holding its position as the world’s largest asset, with a market value of around $31.1 trillion. Silver, after months of trading places with major technology stocks, briefly moved into second place. That position, however, did not hold for long.

Safe-Haven Demand Returns to Metals

Geopolitical tensions, fragile trade routes, and political uncertainty over the past year have reshaped investor behavior. The perception of metals as “stores of value” has regained strength. This time, capital flowed directly into gold and silver.

This shift is not purely defensive. It also reflects an ongoing attempt to rebalance global portfolios. Expectations of short-term volatility continue to support demand for precious metals.

A Different Race on the Technology Side

While silver competed for second place, Nvidia’s rapid rebound stood out. Demand for artificial intelligence–driven computing power continues to support its valuation. This contrast highlights the unresolved tension between safe-haven assets and high-growth opportunities.

Still, the sharp rise in metal prices suggests protection is currently the priority. Gold recently tested $4,500, while silver approached $80, marking fresh all-time highs.

Spot Prices (USD):
Gold (Gold Spot): ~ $4,476
Silver (Silver Spot): ~ $80.95

Rate Expectations Sit Beneath the Pricing

One of the most closely watched themes is the US Federal Reserve’s next policy direction. Under the new chair, expectations for potential rate cuts have gained traction. This outlook continues to fuel interest in commodities.

Expectations of lower rates are strengthening. Yield-free assets are becoming attractive again. This suggests that the rally in metals cannot be explained by geopolitical risk alone.

Crypto Has Yet to Take the Stage

Bitcoin currently ranks eighth by market capitalization. The recent momentum in metals has not fully reached crypto markets. Many investors see this pause as temporary.

According to Clear Street Managing Director Owen Lau, the Fed’s policy decisions in 2026 could shape the next phase for crypto. Lower rates, he argues, may alter liquidity conditions and push investors back toward risk assets.

Timing remains the key variable. As pricing in gold and silver approaches saturation, the narrative around “digital gold” could return to focus.

Why It Matters

This brief but powerful return to the top shows that risk appetite has not fully reopened. The metal-led rally may offer early signals about where capital could flow next.

Whether this balance holds remains uncertain. Still, pressure building in metals may gradually create new ground for crypto and other risk-sensitive assets.

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