tl;dr
Citadel’s Ken Griffin reveals how investors are ditching the U.S. dollar for Bitcoin and precious metals, driven by inflation, government shutdowns, and a surge in M2 money supply. The 'debasement trade' is reshaping wealth preservation strategies.
**Citadel’s Ken Griffin: The Rise of the “Debasement Trade” as Investors Flee the Dollar**
In a recent interview with Bloomberg, Citadel’s founder and CEO, Ken Griffin, highlighted a growing trend among individual investors: the shift toward precious metals and Bitcoin (BTC) as a “debasement trade” to hedge against the weakening U.S. dollar. This strategy, driven by concerns over inflation, fiscal instability, and geopolitical risks, reflects a broader movement to de-dollarize portfolios and protect wealth from the erosion of fiat currency.
Griffin emphasized that investors are increasingly seeking alternatives to traditional assets, with silver, gold, and Bitcoin emerging as key tools to “de-risk” against U.S. sovereign risk. “We’re seeing substantial asset inflation away from the dollar as people look for ways to effectively de-dollarize,” he stated, underscoring the rising demand for assets perceived as safer stores of value.
### The Debasement Trade and the 2025 Government Shutdown
The phenomenon has gained momentum amid the ongoing U.S. government shutdown, which began on October 1, 2025. This fiscal impasse has coincided with record prices for gold and a surge in Bitcoin’s value, marking what Griffin describes as a “debasement trade” in 2025. Notably, this contrasts sharply with the 2023 bear market, when a similar government impasse triggered a 30% price drop for BTC.
Polymarket predictions suggest the shutdown will persist until October 15, 2025. If the BTC rally continues without a correction, it would further validate the narrative of Bitcoin as a safe-haven asset in times of systemic uncertainty. Griffin noted that the U.S. economy is “over-supplied with fiat,” with excessive liquidity driving markets—including Bitcoin, gold, and the S&P 500—toward record highs.
### The Role of M2 Money Supply and Fiscal Policy
Griffin pointed to the expansion of the U.S. M2 money supply as a critical factor. While the surge in liquidity has fueled a BTC rally, the recent government shutdown acted as the catalyst for the asset’s all-time high. “The real trigger was the shutdown,” he said, highlighting how political and fiscal instability amplifies demand for alternative assets.
This trend aligns with historical patterns where cryptocurrencies have served as hedges in volatile markets. However, Griffin noted a shift: Bitcoin is now emerging as a “safe haven” for developed markets, not just emerging economies facing currency crises.
### Bitcoin’s Volatility and Future Outlook
Despite its bullish trajectory, Bitcoin remains volatile. After breaching $125,000, the asset dipped to $123,900, a fluctuation that underscores its susceptibility to liquidations and short-term market swings. However, Griffin believes the current bull run could extend beyond 2025, with expectations for continued growth in 2026.
The addition of Bitcoin to the “debasement trade” portfolio may prolong the cycle, as strategic selling by whales and corporate buyers—such as increased treasury allocations—signal long-term confidence. Inflows into Bitcoin ETFs and institutional adoption further bolster the asset’s credibility, while limited selling pressure from large wallets suggests a bullish outlook.
### A Crossroads for Bitcoin
As of now, Bitcoin stands at a critical juncture. The asset could either sustain its bull run or face a correction, depending on macroeconomic factors and market sentiment. Griffin’s analysis suggests that the current cycle is distinct from past crashes, with fewer deep drawdowns and more resilience.
For investors, the “debasement trade” represents a strategic response to a financial system perceived as increasingly unstable. As the U.S. dollar’s dominance faces challenges and alternative assets gain traction, the interplay between fiat, gold, and Bitcoin will likely shape the next phase of global markets.
In an era of uncertainty, the shift toward decentralized and tangible assets signals a fundamental reevaluation of wealth preservation strategies—one that could redefine the role of money in the decades to come.