The proliferation of stablecoins could herald the growing dominance of the dollar, with potential negative implications for commodities and traditional gold compared to the digital version. What we call crypto dollars, Tether is the leader with a market cap of around $137 billion – indicating support for the dollar and resistance for commodities and gold.
1. Challenges for commodities and rising crypto-dollar assets
With a market cap of around $137 billion, the rising value of leading crypto-dollar Tether could indicate a base for the dollar and challenges for commodities. The organic adoption of the dollar as a base layer of the new technology could be a significant statement against other currencies. Our chart shows the tendency of the Bloomberg Commodity Spot Index to bottom when the trade-weighted dollar peaks, amid the divergence in commodity weakness since the dollar’s October 2022 peak. BCOM may have set a permanent top following Russia’s invasion of Ukraine.
What it would take for the dollar to decline against a basket of currencies is an important question for commodity stability. Gold may have an edge, but it faces competition from Bitcoin. Newly elected President Donald Trump could add support for crypto dollars.

2. Traditional gold fades in competition with digital Bitcoin.
A robust US stock market, currency, 4% interest rates, and growing Bitcoin adoption are all challenges for gold. In a world that is going digital, a crypto-friendly new US leadership could add competition to the metal. Our bias remains bullish on gold prices, but investments in the metal without a bit of Bitcoin in this sector could lag behind the digitalization trends. An example of this is the tokenization of dollars (crypto dollars), and the market cap of crypto dollars of about $190 billion has grown from about $2 billion at the end of 2019.
Our chart shows the Bitcoin to gold ratio (in ounces) at the 37x resistance level – trying to catch up with the S&P 500. A decline in Bitcoin could be a major risk, and the average level of 10-year bond yields in the top 5 economies by GDP after the US – about a 100 bp retreat from US Treasuries on December 6 – suggests deflation.

3. Commodities Could Be in a Win-Win Situation Against Crypto Dollars
The fact that it has been an oxymoron for over a decade for the dollar to fall while the US stock market is rising could point to challenges for commodities in 2025. Our chart shows the tendency of the Bloomberg Commodity Spot Index to fall when the dollar is rising and vice versa, and the significant downside if the index were to return to its 2009 uptrend line. This is what could cause the dollar to fall against a basket of trade-weighted currencies, which could be a win-win situation for commodities. The superiority of the US stock market relative to the rest of the world has been a major contributor to the dollar’s advance since 2011.
The spread of crypto dollars shows that the world is moving towards the dollar, likely spurred by the “unlimited friendship” between Presidents Xi Jinping and Vladimir Putin and Russia’s invasion of Ukraine.

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