Markets are shocked by Bitcoin and gold reaching record highs.

Bitcoin and gold at record highs are sending contradictory signals about global risk appetite. The cryptocurrency and precious metal set their first simultaneous records since Bitcoin launched more over a decade ago. Gold has been a store of wealth for millennia, but Bitcoin's significance beyond speculation is highly debated.

Bitcoin has risen over 50% this year due to inflows into newly launched US exchange-traded funds that contain it. However, gold's gain may signal defensive positioning due to geopolitical uncertainty or a global stock downturn after a record run

Chris Weston, head of research for Pepperstone Group Ltd., suggests looking at traders who chase short-term momentum across asset classes to square the circle.

Gold has been hugely traded overnight, the volumes are massive—I've had many client calls asking what's going on," he said. Fast-money investors “are buying the momentum and that is what we are seeing in Bitcoin as well.”

Expectations of looser monetary policy benefit Bitcoin and gold. Swaps markets expect a 62% Federal Reserve interest-rate decrease in June, up from 58% in February.

Bitcoin reached a record $69,191.95 in the US on Tuesday, surpassing its prior peak of November 2021, before falling to $63,300 in Singapore at lunchtime Wednesday.

On Tuesday, gold reached $2,141.79 an ounce, surpassing the early December high. The precious metal rose roughly 5% in five sessions.

Kyle Rodda, senior market analyst at Capital.Com Inc., linked crypto to equities markets and risk-taking. “We’re seeing a resurgence in meme coins that suggests irrational, risk-taking behavior — which is consistent with some equity market developments.”