Bitcoin And Gold Are Both LOSING In 2026 - Why?

Bitcoin and gold were described as the worst-performing major assets so far in 2026, down 7.3% and 7.5%, respectively, by one estimate; another put gold’s decline at about 8%. Speakers said both have weakened alongside stocks as investors reassess risk. Mike attributed pressure on volatile, non-income-producing assets to rising yields and the Fed’s stance. Anna Wong believes the Fed is done hiking and says inflation measures for AI-related computers and software have fallen over the past two to three months. She estimates that higher bond yields have already tightened financial conditions by the equivalent of about 150 basis points of rate hikes.

Ira Jersey said the five-year/30-year yield curve has flattened since August as markets repriced expectations for Fed policy, but he does not expect a major move toward more hawkish Fed guidance. Heavy Treasury issuance remains a factor, though Jersey does not think hyperscaler borrowing is crowding out Treasury supply. Speakers said near-term liquidity has tightened modestly: Treasury cash was $962 billion, overnight reverse repo was near zero, and bank reserves had slipped. One noted that liquidity often falls around this point in October as funds approach fiscal year-end. The Fed is monitoring credit spreads, but is unlikely to intervene unless needed to prevent contagion.

Gold’s value drew sharply different estimates. One analysis put fair value near $4,000, down from a previous $4,500 estimate; another said liquidity could take gold to either $3,500 or $4,500 in the short term. A further view was that global deficits should support liquidity, and thus gold, over the long run even if flows divert temporarily. Gold relative to a basket of Treasuries was said to be near its highest level since 1983. One speaker sees that valuation as a significant opportunity if markets weaken, while another argued gold and silver have become highly speculative in the short term through contracts for difference.

Bitcoin was below $80,000 during the discussion, after trading near $78,000 for four weeks two to three months earlier, and remained under pressure amid credit unwinding. One speaker’s base case is that it will fluctuate around current levels until the market’s direction and the winning companies become clearer. Over the prior 12 months, the Nasdaq gained 15% while Bitcoin fell 26%, although Bitcoin’s intraday direction still matched the Nasdaq more than half the time. One bearish view is that Bitcoin is not currently a hedge and that its relative decline against the S&P 500 may have further to run. Others counter that a six-month rise in hash rate and Bitcoin’s tendency to track aggregate debt support its fundamentals; they also argue institutional ownership has reduced volatility as stronger holders buy and weaker or older holders sell. Whether Bitcoin becomes “digital gold” remains unresolved.

The AI infrastructure boom is creating credit risks, but Peter Cheer said the sell-off was still controlled, with wider spreads concentrated in compute-buildout companies and some French banks. LQD and HYG were trading around net asset value, suggesting selling had not become disorderly, though credit markets may be less liquid than investors assume. Cheer expects hyperscalers to keep buying scarce compute, but cautioned that spending could exceed what debt markets can support. He cited Elon Musk’s view that debt financing is nearly shut to companies without substantial revenue independent of AI data centers, and that smaller neoclouds could face failures and consolidation. Cheap Chinese compute, reportedly available at as little as one-twentieth the price with only a marginal performance gap to leading models, is another competitive risk.

Several speakers warned that wider credit spreads could raise growth concerns and push equities lower, particularly as fiscal stimulus fades and AI spending or competition changes. One described a K-shaped economy in which wages lag asset inflation while corporate profits are unusually high as a share of GDP; despite elevated stock-price-to-GDP measures, profitability was said to be less stretched than before the 2000 and 2008 downturns. Speakers generally favored Treasuries, and one advised being willing to sell risk assets rather than risk missing the exit. If stocks fell 10%–20%, five-year yields near 5% could, in one scenario, fall to 3%–3.3%; failure of yields to decline would be a warning of a global recession. Views on Bitcoin and gold in a downturn differed, with one speaker saying Bitcoin could outperform gold if European instability intensified because it is more movable.