Global capital markets have experienced intense volatility right at the start of the new year. On January 5th, when markets opened, most global markets rose, but US stock futures remained flat, a contrast that highlights the cautious attitude of capital towards the current situation. Meanwhile, mainstream assets in the crypto market—Bitcoin, Ethereum, Binance Coin, and others—began to react to signals from the macroeconomic landscape.

The key turning point occurred with a change in the Federal Reserve's stance. On the first trading day of 2026, Minneapolis Fed President Kashkari sent a clear signal in a televised interview: although inflation remains a challenge, the more urgent risk is a potential surge in unemployment, making rate cuts an inevitable choice. This politician, once known for his hawkish stance, made a 180-degree turn, instantly igniting market imagination.

Wall Street responded immediately. Once the news broke, the Dow Jones Industrial Average surged to a new all-time high; the S&P 500 followed closely behind. Driven by expectations of rate cuts and liquidity release, stock market records continued to be broken. However, behind this prosperity lies a deeper economic reality.

The most direct manifestation is the surge in precious metals. Gold and silver prices are rushing toward historic highs, not just driven by investor enthusiasm but reflecting a real decline in the dollar’s purchasing power. Physical goods that can be bought with dollars are gradually decreasing. More strikingly, the dollar’s share in global foreign exchange reserves has fallen to 42%, a new low since 2000. This indicates an irreversible trend: central banks worldwide are accelerating de-dollarization, actively increasing holdings of gold and other hard assets.

The driving forces behind this phenomenon merit deeper exploration. Although US stocks repeatedly hit new highs in nominal terms, when priced in gold, this "prosperity" appears pale and powerless. The dollar’s depreciation relative to precious metals exposes the rapid evaporation of the base currency’s purchasing power. Central banks’ choices are clear: they are voting with their actions against the dollar.

The initiation of rate cuts further accelerates this trend. Loose monetary policy can push up the nominal value of assets, but it also leads to liquidity flooding, which depresses real purchasing power. For investors seeking stores of value, this creates dual attraction toward precious metals and cryptocurrencies. Cryptocurrencies like Bitcoin and Ethereum, in this macro context, are being repositioned as "non-sovereign currencies" and "value storage tools," gradually attracting institutional and national-level investors.

While the dollar’s status as the global reserve currency remains solid—despite countries accelerating their escape from it, it remains difficult to completely detach from the dollar system in the short term—this "too big to fail" situation is gradually eroding. If the de-dollarization trend reaches a critical point, the global financial system might revert to a gold standard or a similar asset-backed system, at which point the numerical gains on dollar assets would lose all significance.

The true measure of wealth has never been how large the numbers in accounts are, but whether these numbers can be exchanged for tangible goods and services in international trade. In the context of a rate-cutting wave and accelerating dollar depreciation, investors need to reassess their asset allocations—whether the growth of digital assets corresponds to real value increases is the most important question to consider.