Bitcoin and gold surge after US elections, but $378 million short squeeze casts doubt on debasement trade

Bitcoin's rally above $81,000 alongside gold has revived speculation that investors are seeking protection against the weakening US dollar. The largest cryptocurrency rebounded from about $75,600 on Nov. 4, while gold futures surged 3.4% to $4,061.10, their biggest daily gain in three months. The dollar also weakened as investors digested the Democrats' sweeping victory in the US midterm elections. The simultaneous gains revived talks of “ the debasement trade ,” a strategy in which investors buy scarce assets such as Bitcoin and gold to protect their wealth against currency depreciation and mounting government debt. However, broader financial markets told a more complicated story.

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