Gold prices are soaring wildly: The night before a crisis or a wealth opportunity? An experienced crypto veteran offers a deep reflection

Gold is hitting new records on the K-chart, but eager investors in front of their screens might want to stay calm. As a witness who has experienced three bull and bear cycles in the cryptocurrency market, I am accustomed to using the transparent perspective of blockchain to evaluate traditional assets. Recently, the gold price trend has made me cautious: this rally is not merely risk hedging but a forecasted performance of the confluence of geopolitical, monetary, and debt crises.
I. The history of the gold bull market: A reflection of crisis
Reviewing nearly 50 years of data, the super-long cycle of gold is closely related to systemic risk:
1971-1980: After the collapse of the Bretton Woods system, gold increased from $35 to $850 over 10 years, a more than 24-fold increase. It seems due to the oil crisis and stagflation, but in reality, it directly reflects the US dollar credit crisis. Events like the global banking crisis of 1974, the energy crisis of 1979, each gold price surge signaled an upcoming economic adjustment.
2001-2011: Gold rose from $250 to $1920 after the US tech bubble burst, 9/11, and the subprime mortgage crisis. Notably, after Lehman’s bankruptcy in 2008, gold also experienced a sharp sell-off—down 30% in three months—but then quantitative easing pushed gold to historic highs.
What these two cycles have in common is: gold is never a safe haven during crises but a timing indicator of crises. It early reflects 18-24 months of systemic weakness, but when the “black swan” truly appears, all assets are not immune from liquidity black holes.
II. Three main concerns of the current market
This time, the reasons for gold’s rally are much more complex:
1. The “Minsky Moment” of the dollar system
The dollar index and gold are rising strongly together, which seems unusual. But the 2024 scenario is: the dollar is strong against the euro, yen, but continuously losing value against oil, gold, bitcoin. This weak structure is more dangerous than a total collapse—it indicates that globally, efforts are underway to find alternatives to the dollar, just not unified yet. Once a sovereign currency or regional currency (e.g., digital euro) succeeds, the dollar’s collapse could happen more intermittently than gradually.
2. The “Volcker Trap” of the Fed
In 1971, Nixon closed the gold window, and the Fed still hoped inflation would self-correct. Currently, Powell faces a tougher dilemma: continuing to raise interest rates could trigger a commercial real estate bubble and high debt, while stopping rate hikes would inevitably lead to stagflation. The current gold price of $2080/ounce reflects expectations of at least 200 basis points rate cuts and accepting 3% inflation. Any policy adjustment could cause a sharp revaluation.
3. The “gray tiger” geopolitical situation
The Russia-Ukraine conflict, Middle East volatility, Taiwan Strait tensions… unlike the 1970s, current risks are continuous. Central banks of various countries have been buying net gold for 12 months, not only to diversify reserves but also as a protest against the weaponization of the SWIFT system.
III. Deadly mistakes of crypto investors
Many in the coin community think “Gold rising = Bitcoin rising,” which is very dangerous and unrealistic.
Liquidity stratification theory tells us: During the initial phase of (panic), all risky assets are sold off indiscriminately, with BTC and gold strongly negatively correlated at -0.8. In March 2020, gold fell 12%, Bitcoin halved; in October 2008, gold dropped 30%, S&P 500 down 17%. The main reason is that organizations need to replenish dollar liquidity, and crypto assets are the most efficient tool for cashing out.
Only when the crisis enters the second phase (policy response), do gold and bitcoin diverge. Gold benefits from declining nominal interest rates, while bitcoin benefits from abundant liquidity and fears of devaluation. But remember, from phase one to phase two, the market typically takes 6-9 months, during which investors can go bankrupt three times using leverage.
IV. Opportunities within danger: Asymmetric allocation strategies
The real opportunity lies in the “time gap” of the crisis:
1. Before the crisis erupts (- 3 months):
• Minimize all leverage positions, including crypto contracts and gold ETF loans
• Build cash reserves in fiat dollars (not USDT, but legal tender dollars)
• Allocate small positions using put options to hedge risks
2. During the crisis (3-6 months after eruption):
• When VIX exceeds 40, gold volatility over 30%, start partial allocations
• Prioritize: BTC > gold > commodities > US tech stocks
• Logic: Bitcoin will bottom out first (with the largest shock to cash flow), responding most strongly; gold will decline less but recover more slowly
3. After the crisis (Clearer policies):
• Transfer 30% of profits from gold into cryptocurrencies
• Focus on DeFi projects with positive cash flow and Layer2 infrastructure
• Invest in distressed but fundamentally unchanged stock tokens
V. Survival tips for different investors
Newcomers (capital under $50,000): Avoid futures trading in gold, avoid contracts. Keep 90% in USDC/USDT, 10% evenly in Bitcoin. When the crisis hits, your task is capital preservation, not hunting for the bottom to get rich quickly.
Intermediate (capital $50,000-$500,000): Make a “watchlist” of main coins like SOL, AVAX, and infrastructure projects like PENDLE, GMX. Set buy orders (at current price - 60%), automate, and avoid emotional decisions.
High-net-worth clients: Consider setting up physical gold vaults in Hong Kong or Singapore, and hold direct gold ETFs through legitimate channels. Your goal is to preserve assets across generations, not maximize short-term profits.
Conclusion: The asset transfer window is opening
Gold price increases serve as a reminder for the wise, not an invitation for the greedy. The most important thing now is not predicting whether gold can surpass $3000, but ensuring that when the best assets fall three times, you still have the courage and ammunition to act.
Markets always create opportunities in discord and traps in consensus. When everyone talks about gold, the real opportunity may be hiding in illiquid corners unnoticed.
Have you prepared your crisis list? Share your allocation strategy in the comments—whether betting big on gold or keeping a clean slate for crypto buys. If you agree, don’t hesitate to share so other investors who are lost can learn.