Fund Managers Shift Assets to Bitcoin and Gold

Investment firms are increasingly executing a dollar debasement trade by shifting capital into gold, Bitcoin, and emerging-market bonds. This rotation is driven by anxiety over the US national debt reaching $40 trillion and concerns that the US dollar is losing its purchasing power as a store of value.

JPMorgan Asset Management and other firms, including Invesco Ltd. and Marlborough Investment Management Limited, argue that emerging markets now offer superior fiscal management and more disciplined inflation targeting than developed nations such as the US, France, and Germany. This trend gained momentum in mid-August following an announcement by Treasury Secretary Scott Bessent regarding plans to buy back longer-maturity Treasuries.

While emerging-market local-currency bonds have gained 3.3% this year, the strategy faces headwinds from rising global oil prices and climbing US Treasury 10-year yields. Federal Reserve Chairman Kevin Warsh has vowed to fight inflation as part of the broader economic response.