Bitcoin price faces pressure; why are institutions turning to tokenized gold?

Bitcoin prices have recently fallen into a volatile stalemate, while tokenized gold has become a new favorite among crypto whales. Behind this phenomenon, it reflects not a rejection of crypto assets but a precise hedging choice under specific macroeconomic conditions. Recent data shows that several top addresses have withdrawn approximately $14.33 million worth of tokenized gold (XAUT, PAXG) from exchanges, a shift in flow that warrants in-depth analysis.

Stage-wise Divergence Between Gold and Bitcoin Prices

The current market exhibits a clear asset misalignment. Spot gold remains in the $4,930–$4,960 per ounce range (based on latest quotes for XAUT at $4.93K and PAXG at $4.96K), while Bitcoin has slid to $68,510, down 28.65% from the beginning of the year. The two major safe-haven assets have shown significant divergence—gold has gained about 64% over the past year, and since early 2026, it still maintains an 18% increase, whereas Bitcoin prices are hovering at lows.

This divergence is not accidental. The rise in precious metals prices is supported by multiple factors: escalating geopolitical risks, ongoing central bank gold reserve accumulations, and the broader trend of reserve asset diversification. Currently, gold has surpassed the dollar to become the world’s largest store of value, aligning with the era’s demand for non-fiat currency storage. In contrast, Bitcoin’s stagnation mainly stems from liquidity pressures.

Capital Outflows Suppress Demand; Why Are Institutions Still Favoring Tokenized Gold?

According to the latest data, global crypto ETPs (Exchange-Traded Products) experienced a weekly net outflow of up to $1.811 billion, with U.S. Bitcoin ETFs alone seeing a weekly net outflow of $1.324 billion, directly weakening new buying interest. The derivatives market also shows defensive positioning, with a three-month annualized yield rising to 4.8%, and options markets favoring downside protection strategies. The crypto market’s fear and greed index has returned to the fear zone, with Bitcoin prices facing what is known as “maximum pain” pressure in the $75,000–$81,000 range.

Against this backdrop, whale investors are making rational and pragmatic choices. Their shift toward tokenized gold like XAUT and PAXG is primarily driven by the convenience of trading around the clock and quick settlement without leaving the crypto ecosystem. The withdrawal signals from exchanges suggest a long-term holding intent—meaning market participants are not abandoning crypto assets but are strategically hedging during capital outflows. Even stablecoin giant Tether bought 27 tons of gold as reserves in Q4 2025, serving as an internal hedging tool.

Rebound Opportunities at the End of the Cycle

From a long-term perspective, the current divergence between Bitcoin and gold is more a lagging phenomenon than a structural break. Bitwise data presents a key signal: the Bitcoin/gold ratio relative to global money supply is approaching an extreme, and currently, it is at the end of a 14-month historical bear cycle.

What does this imply? Once ETF capital outflows turn into inflows, or the ratio reverts from extreme levels to normal ranges, the rotation of funds could trigger a rebound in Bitcoin prices. Although both gold and Bitcoin are non-fiat stores of value, their performance varies across different macro cycles: during panic phases, markets favor low-volatility gold, while in periods of currency devaluation or rising inflation expectations, Bitcoin tends to rise faster once liquidity recovers. The current situation—“hot gold, stagnant Bitcoin”—is essentially a temporary market trade-off between different risk preferences, not a fundamental change in the long-term landscape.