Bob Murphy: Gold over Bitcoin amid economic uncertainty; central banks shift away from dollar, US power wanes
Economist Bob Murphy (Mises Institute, infineo) told The Pomp Podcast that in times of true economic uncertainty investors tend to favour gold over Bitcoin as a panic-era safe haven, and may liquidate crypto holdings to raise cash. He argues the global economic order is shifting toward a multipolar system, reducing US dominance, while central banks are actively diversifying reserves away from the dollar — a development Murphy describes as the end of dollar hegemony. Murphy highlighted the Federal Reserve’s outsized role in financing U.S. debt (roughly $4 trillion in treasuries, more than the next several countries combined) and warned that a one percentage-point upward shift in the Treasury yield curve could add about $380 billion in annual interest costs. He also questioned the Fed’s practical independence, pointing to political alignment of Fed actions with fiscal needs during large deficits and calling for restoration of its original, more independent remit. Murphy flagged potential housing-market risks in 2026 tied to Fed policy changes. Key takeaways for traders: preference for gold over BTC during acute uncertainty, central-bank de-dollarization pressures, Fed balance-sheet and interest-rate sensitivity that could spike bond yields and borrowing costs, and heightened geopolitical shifts likely to affect currency and macro risk sentiment.
Bearish
The net effect is bearish for crypto markets, especially Bitcoin, in the near term. Murphy’s central points — that investors prefer gold over Bitcoin during acute uncertainty and that central banks are diversifying away from the dollar — increase flight-to-safety pressure on risk assets. If the Fed’s balance-sheet constraints and a rising Treasury yield curve materialize (Murphy’s cited $380bn/year sensitivity), higher rates would raise financing costs, weigh on risk assets and could trigger deleveraging in crypto. Historical parallels: during acute risk-off episodes (e.g., March 2020 COVID crash; 2022 rate shock), BTC fell sharply while gold and cash were favoured; rising bond yields and Fed tightening correlated with prolonged crypto drawdowns. In the short term expect increased volatility, potential BTC outflows, and underperformance vs. traditional safe havens. In the medium-to-long term, structural narratives (de-dollarization, central-bank reserve shifts) create macro uncertainty that can sustain higher volatility and fragmentation of capital flows; however, if crypto matures as a macro-hedge or sees clearer regulatory/fiscal backstops, market sentiment could recover. Traders should monitor: Fed communications and balance-sheet moves, Treasury yields, central-bank reserve announcements, gold flows, and on-chain/venue outflows to anticipate liquidity-driven price moves.