Investors Shift to Crypto, Tokenized Assets Amid US Dollar Weakness, Inflation Fears

Investors are increasingly turning to digital assets and tokenized alternatives as the US dollar falters and inflation risks rise. The escalating trade war chaos and abounding recession concerns have put the status of the US as a haven in question while exacerbating volatility in financial markets.

In emerging markets, trading activity has surged for particular assets. In countries like Indonesia and Pakistan, trading activity has more than doubled this week. This suggests that perceptive investors are rethinking their strategies and repurposing their portfolios. Specifically, they are looking to new avenues, such as emerging markets, where access to traditional assets has historically been limited.

Crypto is leading that surge, but there is also an increased appetite for tokenized gold and US equities. This portfolio diversification effort is unsurprising, considering the US President’s tariff agenda is triggering global market volatility. Already, macroeconomic signals are darkening despite the Federal Reserve’s current inflation figures not fully reflecting the impact of ongoing tariffs.

Economists are sounding the alarm, with the chief economist warning of inflationary pressures by summer. This warning aligns with the assertion that retaliatory tariffs on US goods lack competitiveness under current tariffs. Recognizing that tariffs are effectively a tax on imports paid by US businesses, these costs are usually passed on to consumers.

Meanwhile, as the investment scope shifts for well-informed investors, it is noted that investors in high-growth markets aren’t retreating; they’re recalibrating — seeking diversification and more control in an unpredictable environment. Against this backdrop, crypto, tokenized commodities, and digital access to US equities are the hedges of choice for now.