📊 Gold vs. Bitcoin: A shift in dynamics

Last week, capital rapidly shifted toward traditional safe-haven assets. Gold reached new all-time highs amid a weakening US dollar, while Bitcoin faced downward pressure from liquidations and ETF outflows, causing its price to plummet.

The tokenized gold market is expanding in tandem with rising demand for physical gold. Tether's XAUt now represents over half of all gold-backed stablecoins, surpassing $2.3 billion in market capitalization.

Central banks ramped up gold purchases in the second half of 2025. Meanwhile, the US dollar has depreciated significantly since President Trump's inauguration, recently hitting multi-month lows.

Bitcoin failed to capitalize on this flight to safety. After $1.6 billion in liquidations of long positions, its market cap dropped out of the global top 10 assets, with the price dipping to around $80,000 amid hundreds of millions in additional liquidations.

US spot ETFs exacerbated the negative sentiment, with $1.82 billion withdrawn from Bitcoin and Ethereum funds over five trading days. Precious metals also faced short-term selling after gold and silver hit record highs, reflecting heightened global market volatility and nervosity.

In the short term, liquidity concerns and risk aversion are prevailing, even in conditions that should normally be favorable for alternative hedges.

This cycle highlights a divergence between narratives and actual capital flows: Gold directly benefits from geopolitical tensions and dollar weakness, whereas Bitcoin is still treated as a risk asset. Without sustained inflows, particularly from ETFs, the thesis of Bitcoin as a functional crisis hedge still fails to materialize.

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🤔 Bitcoin undervalued, yet conviction remains weak

Despite the ongoing price decline, many institutional investors view Bitcoin as attractively priced in the $85,000 and $95,000 range. Debates are intensifying about the validity of the traditional four-year cycle and the catalysts needed to drive new gains in 2026.

A recent Coinbase survey found that 71% of institutions consider Bitcoin undervalued in that range, with only 4% seeing it as overvalued. Moreover, 80% are maintaining positions or plan to buy more if prices drop another 10%.

The broader context is precarious: Since October's crash from massive liquidations, the market has trended sideways to downward, contrasting with sharp rises in gold and silver.

"Bitcoin typically follows a four-year cycle, with all-time highs every four years followed by declines. But this year, with the US's crypto-friendly stance and other countries following, we might see an exception—perhaps a supercycle in 2026," said Changpeng Zhao, who ruled out his return at the head of Binance but talked about a possible "supercycle" in 2026.

At the protocol level, Michael Saylor cautioned that "opportunistic" code changes pose Bitcoin's biggest risk, reigniting debates on conservative code freezes versus innovations, for instance for quantum resistance, spam prevention, or new use cases.

Seasonal data offers mixed signals: February has historically been strong for Bitcoin, often more reliable than "Uptober." However, the BTC-to-gold ratio (via Z-score) indicates extremes typical of major bottoms, though there's no assurance of capital rotating from metals to crypto soon.

The message is clear: institutions recognize value, but the market requires more than sentiment to rebound.

"Undervalued" here is less a price forecast than a signal of confidence: those who buy more now are betting on a medium-term upward repricing based on positive macro signals, regulatory clarity, and capital inflows. The Achilles' heel remains the question of the catalyst: without a clear trigger, institutional patience can also stall momentum - not because it sells, but simply because it waits.

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⚖️ When regulation becomes market infrastructure

2026 is poised to be defined by political and institutional actions rather than crypto hype. Key topics include US stablecoin interest debates, stricter European compliance, and UK banking access challenges.

A Wall Street Journal article highlighted the tense exchange at Davos between Jamie Dimon and Brian Armstrong, centering on whether banks are lobbying to block stablecoin yields in a proposed US bill, or if crypto firms are unfairly blaming banks. The legislation remains stalled in Senate committees, with hearings delayed.

In the meantime, the European Commission is pressuring its member states: Twelve of them face warnings for incomplete implementation of the new rules on tax transparency and data exchange for crypto assets. Hungary is under scrutiny for the compliance of its MiCA implementation. All those moves from the EU aim at curbing tax evasion, through new reporting requirements for crypto service providers in line with the OECD framework.

In the UK, a Cryptoasset Business Council survey reveals frequent blocks or delays on transfers between banks and crypto services, often without clear reasons. The industry argues this "debanking" hampers innovation and pushes capital overseas.

The common denominator of these developments underscores power over interfaces: stablecoin yields challenge bank profits, tax rules raise compliance costs, debanking disrupts fiat ramps, and tokenization reshapes markets mechanics.

The core issue transcends "crypto vs. banks", it's rather about who controls future revenue streams and participation in the ecosystem.

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🔒 Ethereum's liquidity is locking up

Ethereum is undergoing a multifaceted evolution in 2026, resembling a system overhaul more than a typical market cycle: reduced exchange supply, new AI agent standards, accelerated post-quantum efforts, and Layer 2s favoring speed.

Santiment data shows ETH on exchanges dropped from 12.31 million in July to 8.15 million, while staking surges with 3.6 million ETH awaiting validation and minimal unstaking. Firms like BitMine are staking large holdings, potentially easing selling pressure.

On the technical side, Ethereum is also enabling AI ecosystems: MetaMask-backed ERC-8004 could soon launch on mainnet, standardizing AI agent registration, discovery, and reputation without central oversight, positioning Ethereum as a hub for AI interactions.

The Ethereum Foundation has assembled a team dedicated to quantum threats. Progress towards post-quantum goals is estimated to be at about 20%, focusing on phased upgrades to execution, consensus, and data layers.

On the scaling side, the MegaETH layer-2 projevt has tested 10.7 billion transactions and plans to launch its mainnet on February 9, promising high TPS though prioritizing performance may compromise decentralization.

Security funding is evolving too: Unclaimed The DAO-era ETH will seed a staking-based fund, managed via DAO for long-term ecosystem protection.

Ethereum's 2026 narrative is one of ongoing construction: capital locking up, standards emerging, and security fortified.

This isn't inherently bullish: lower exchange supply helps stability but can also mean less liquid price discovery. Staking queues signal demand and stability, yet create lock-ins. Layer 2 choices pit UX against decentralization, while post-quantum plans are great but remain to be battle-tested.

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💰 Stablecoins evolving into infrastructure and policy

Stablecoins are no longer "just" crypto liquidity in 2026, but they emerge as competitive payment systems addressing corporate adoption, banking risks, and state sovereignty.

In this context, Circle wants to drive institutional adoption through "blueprints rather than DIY solutions" via Arc, its Layer 1 solution. The network is set to go into production, expanding USDC/EURC integrations, and streamlining treasury tools, enabling stablecoin use without full infrastructure management.

At Tether, the focus is clearly shifting to reserves and liquidity. The company reported $10 billion in 2025 profits (down 23% from 2024) and $122 billion in US Treasuries holdings. It also issued $50 billion in new USDT, driven by demand for accessible dollars outside traditional banking channels, especially where systems are slow or difficult to access.

This growth sparks conflicts: banks fear deposit erosion from interest-bearing stablecoins, with Standard Chartered noting potential correlations between stablecoin growth and declining deposits. Regulators see limited evidence of such outflows, notably in the EU where stablecoins are seen as a niche. Circle's Jeremy Allaire dismissed "bank run" fears at Davos as "absurd", arguing instead that yields can drive user loyalty for banks.

ECB's Piero Cipollone positioned the digital euro as essential for payment sovereignty in a geopolitically "weaponized"" world, pushing for a de facto obligation for merchants to accept digital payments.

Stablecoins now represent a fight over financial rails: who governs dollar proxies, yields, and compliance.

The exciting (and uncomfortable) question is not to be for or against stablecoins, but rather to find out where the system boundaries will lie in the future. If stablecoins become the default collateral and payment tool, the interest rate question will automatically become a banking question, which will automatically become a sovereignty question. Davos shows that the debate has mainstreamed: regulation will determine if stablecoins foster innovation or threaten deposits.

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