The first week of 2026 brought investors a distinctly unromantic reminder. When the macro narrative shifts from “growth and inflation” to “institutional and management-related risks,” the results no longer depend on whose story sounds best, but on which assets appear most independent under stress.
The relative strength of gold and silver, alongside the relative weakness of BTC and ETH, reflects this change in valuation. Hard assets compete for a “premium for independence,” while major cryptocurrencies are increasingly traded, similar to the risk of a highly volatile dollar. This does not mean that cryptocurrencies have lost their long-term justification.
The point is that in the current framework, the market focuses on three questions: What are you settling in? Who is the marginal buyer? In what risk range is the portfolio? In these matters, the gap between precious metals and cryptocurrencies is widening.
USD-denominated financial leverage and 'institutional risk'
A quick look back at Bitcoin over the past year helps. During the April 'Liberation Day' rally, BTC first stabilized, then rebounded, reaching a new peak of 126,000 USD six months later. The narrative of 'digital gold' mattered, but the real booster was USD-denominated derivatives.
From March to October 2025, open interest in BTC Delta 1 contracts rose from around 46 billion USD to over 92 billion USD, giving BTC powerful leverage support and helping it outperform gold in the short term. After reaching a peak, widespread deleveraging in cryptocurrencies and changing institutional expectations pushed BTC into a sustained decline. Gold, on the other hand, continued to rise.
One detail matters: as USDT/USDC and other stablecoins have become entrenched, USD-denominated leverage (not coin leverage) has increasingly driven marginal moves.
As exposure is taken through more normalized, more leveraged channels – exchanges, perps, structured products – behavior becomes more 'portfolio-like': adding risk, cutting within risk budget reductions.
Whether it's USD valuation, USD hedging, or cross-asset hedging built around the U.S. yield curve, BTC can easily be incorporated into those same USD-based risk frameworks. Thus, as dollar liquidity tightens, regardless of the trigger, BTC is often among the first to feel the effects of reduced risk.
In other words, the market has not 'suddenly stopped believing' in digital gold. It increasingly treats BTC as a tradable macro factor – closer to a high-volatility dollar beta than a store of value outside the system.
What is being sold is not so much spot BTC, but USD-denominated exposure to BTC. When financial leverage becomes large enough to dominate fundamentals, BTC behaves like classic risky assets, being sensitive to liquidity, real interest rates, and fiscal policy.
Gold is different – at least for now. Its price still primarily depends on spot supply and demand, not on financial leverage. It also retains monetary characteristics and is widely accepted as collateral: a type of hard offshore currency. This makes it one of the few assets that are not directly dictated by daily fiscal and monetary settings.
In this environment, it matters. The Trump administration increased macroeconomic and political uncertainty (think about what happened in Venezuela and Minnesota). For global investors, holding dollar-denominated assets and dollar leverage is no longer 'parking a ship in a safe harbor'; even at the level of valuations and settlements, it entails more challenging-to-model institutional risks that could undermine the predictability of market rules.
As a result, reducing synthetic exposure to risks associated with U.S. policy is a prudent move. Assets more closely tied to the dollar system – and which behave like risky assets under extreme conditions – are typically cut first. Conversely, assets that are more clearly separated from government credit and less dependent on 'permitted' financial infrastructure appear more favorable in the same risk model.
It's a tailwind for cryptocurrencies and a tailwind for precious metals: it's about independence. When markets fear shifting boundaries of policy and weaker predictability of rules, gold (and other precious metals) gains a higher premium for independence.
Since 2025, this premium has become more evident. A good comparison is silver versus ETH. In the public imagination, ETH was once known as 'digital silver' (and likely was in the PoW era). Both were seen as lower-cap assets, more susceptible to squeezes and moves based on financial leverage.
But ETH, stock-like assets deeply tied to the dollar system, long ago lost any premium for independence. Silver, as one of the historical 'hard offshore currencies,' has not. Investors are clearly willing to pay for that independence.
USD-denominated leverage is also a key reason why options markets remain structurally bearish on BTC and ETH. The 'New Year Effect' briefly lifted both assets in the first few sessions but did not change positioning in the longer term.
Over the past month, as investors continued to price in rising institutional risk in dollar assets, bears on BTC and ETH with longer maturities have continued to grow. As long as the share of USD leverage does not fall significantly, 'independence in the face of institutional uncertainty' is likely to remain a guiding principle for the market.
At the same time, as expectations for valuations of dollar-linked assets are lowered, investors are demanding higher risk premiums. The yield on 10-year Treasury bonds remains high at around 4.2%. Since the Treasury and the Fed cannot fully dictate the prices of the 10-year period, this level raises the baseline rate for risky assets.
However, the 'dollar discount' associated with USD leverage compresses the implied term returns for BTC and ETH (to 5.06% and 3.93% respectively). BTC may still look decent; ETH, much less so. ETH thus carries a deeper dollar beta discount: yields are not competitive, and upside convexity is limited. None of this negates Ethereum's long-term potential – but it alters allocation choices in a one-year perspective.
Cryptocurrencies can of course bounce back from the bottom: if financial conditions ease, political uncertainty disappears, or the market returns to growth and liquidity valuation, high-volatility assets will naturally react. However, macro investors focus on taxonomy. When institutional uncertainty prevails, trading cryptocurrencies resembles risky assets, while trading precious metals resembles 'unique assets'.
Here’s the message heading into 2026: cryptocurrencies have not 'failed' – they have simply lost their price position as independent assets in this macro regime for now.
Disclaimer: The information contained in this document does not constitute investment advice, financial advice, trading advice, or any other advice and should not be treated as such. All content presented herein is for informational purposes only.
