The awakening of gold and the dollar: why Bitcoin remains in trouble in 2026

As the global market risk aversion sentiment spreads, a subtle asset rotation is underway. Gold and the US dollar are regaining investor favor with their strongest momentum in decades, while Bitcoin remains unusually calm under the support of institutional capital. Recent data shows Bitcoin fell below $87.79K at the end of January, with a 24-hour decline of -2.26%, whereas gold and silver are hitting new all-time highs. This contrast raises a key question: Is Bitcoin’s tranquility a sign of maturity, or is market valuation off?

From Risk Assets to Institutional Assets: Bitcoin’s Calm Transition

XBT0 founder Phillip Bekhazi offers an interesting perspective: Bitcoin is not in decline but is “transforming.” He believes Bitcoin is evolving from a speculative risk asset into an institutional-grade fundamental asset, fundamentally changing market dynamics.

A core feature of this transition is a significant decrease in volatility. Over the past six months, despite continuous increases in institutional holdings, Bitcoin has mostly consolidated below its historical highs. In stark contrast, traditional precious metals and dollar assets are experiencing their strongest upward surge in decades.

Bekhazi points out that this performance divergence does not indicate waning confidence in Bitcoin but reflects a fundamental shift in institutional investor behavior. He states, “There is a difference between Bitcoin and what we call ‘cryptocurrencies.’” This suggests a broader concept: Bitcoin’s “story” is crystallizing, and its risk profile is being reshaped.

Gold Reclaims the Throne: Capital Migration Under the Dollar Crisis

As macroeconomic uncertainty intensifies, traditional safe-haven assets are beginning to show their strength. Gold and silver are breaking records, with the London Bullion Market Association (LBMA) forecasting in 2026 reaching the most optimistic level of this century. Analysts expect gold prices to rise nearly 40% over 2025, with silver potentially doubling.

This gold price surge is closely linked to the strength of the dollar and rising global political risks. Bekhazi explains the logic of capital rotation: during macro pressures, especially when governments and central banks lack liquidity and authority to execute large-scale capital transfers, gold remains the preferred “safe-haven currency” worldwide. In contrast, Bitcoin, as a relatively young asset, has not yet been widely allocated by large sovereign funds.

The strength of the US dollar index further accelerates this rotation. In a risk-averse environment, the dollar’s role as the ultimate safe asset is reinforced, attracting large amounts of capital seeking safety. Meanwhile, risk assets like Bitcoin face pressure. Ethereum dropped to $2.93K (24-hour decline of -3.63%), underperforming Bitcoin, reflecting liquidation pressures faced by retail and leveraged traders.

How Institutional Investors Are Changing the Game

The entry of institutional capital should have brought stability to Bitcoin, but it has actually changed the source of profit mechanisms. Bitcoin no longer generates returns through simple price appreciation but via complex risk management tools.

Bekhazi emphasizes a key observation: large investors often want exposure to Bitcoin but also need to hedge against price declines. This demand has fueled a surge in derivatives markets—futures, options, and swaps becoming core parts of institutional portfolios. The October liquidation cascade (over $19 billion in liquidations) confirms this, indicating that active fund managers in the market have become key players in risk transfer rather than mere directional bettors.

At the same time, the decentralized structure of the crypto market—“unique issues” across exchanges—continues to create arbitrage opportunities. This allows active fund managers to generate excess returns by capturing pricing dislocations in microstructure.

Recent token buyback plans approved by the Optimism (OP) community also reflect deeper institutional thinking. With OP at around $0.28, the community has agreed to use about half of the Superchain revenue for a 12-month token buyback—typical of institutional capital allocation thinking rather than simple price speculation.

Relative Valuation Wins Over Absolute Price

This is the most subtle part of Bekhazi’s argument. He believes that in the institutional era, the relative value of Bitcoin/Gold is more important than their absolute prices. Currently, gold absorbs urgent and large-scale demand, while Bitcoin is increasingly viewed as a tool for corporate balance sheets and long-term investment portfolios.

This perspective implies that even if gold continues to rise while Bitcoin remains relatively stagnant, from an asset allocation standpoint, this rotation may be cyclical rather than structural. But it also leaves an open question: if the dollar remains strong amid future macro shocks, how much will Bitcoin’s long-term narrative be challenged?

The Market Is Asking a Fundamental Question

Bekhazi clearly states three conditions that could invalidate his thesis:

If Bitcoin performs like high-beta tech assets during inflation or crises—then the “digital gold” narrative will be completely discredited. If ETFs experience persistent net outflows during routine 20% corrections—that would indicate weak institutional backing. If price rises are accompanied by declining on-chain activity or reduced stablecoin usage—that would suggest the institutional era is built on speculation rather than utility.

Currently, the market is testing a core hypothesis: can Bitcoin remain stable under macro pressures while gold and the dollar absorb the largest safe-haven demand? Is this stability a sign of market maturity, or a misjudgment of Bitcoin’s capacity as the ultimate store of value? Data from Q1 2026 will begin to provide answers.