Gold, silver, and bitcoin surged as investors sought a hedge against rising debt and political uncertainty. Gold futures neared $4,000, silver futures jumped to $48.50, and bitcoin hit a record north of $125,790. The “debasement trade” trend sees investors moving into assets to counter fiat currency devaluation from inflation and heavy government spending.

JPMorgan analysts noted the rise in precious metals and cryptocurrencies against the backdrop of “dollar debasement.” The US dollar index is down over 9% year to date. Fiscal uncertainty in developed markets drives a flight to safe-haven assets, with Sanae Takaichi set to become Japan’s next prime minister.

Takaichi’s election reflects a shift towards a “Run It Hot” fiscal dominance framework, carrying monster deficits to outgrow debt. Gold and silver have surged over 50% and 60% year to date, respectively, as expectations of Federal Reserve rate cuts boost their appeal. Bitcoin is up roughly 33% year to date.

Bitcoin’s safe haven narrative is amplified by the ongoing US government shutdown, leading investors to shift from US-related assets to resilient options. Wall Street anticipates further gains for the crypto space as stablecoin issuance boosts native tokens for blockchains like Ethereum, Solana, and Hyperliquid.

Stablecoin adoption is seen as the next wave of crypto adoption, with potential positive impacts on crypto overall. Shares of Circle, a stablecoin issuer, have surged 115% since its IPO in June. Related stocks like Robinhood and Coinbase have also seen significant gains, with Robinhood up 295% year to date.

Ines Ferre, a senior business reporter for Yahoo Finance, covers the latest developments in the crypto space. Follow her on Twitter at @ines_ferre. Stay updated on the latest cryptocurrency news, prices, and updates on Yahoo Finance. Read the latest financial and business news for more insights.

Read more at Yahoo Finance: Bitcoin, gold, and silver surge as ‘run it hot’ policies fuel flight to safety