Metal Mania

It’s gold’s time to shine (pun intended) and the sooner we accept that, the better. Crypto has been lagging and there are plenty of reasons why. But, there are still positives around if you know where to look.

Today’s forward guidance highlights some reasons to be optimistic, including the imminent launch of some high-profile crypto ventures - not exactly the sort of thing you’d expect if the smart money behind them was overwhelmingly bearish. Plus, is BTC oversold and could it be next in line for a pump?

But, as gold is hogging the spotlight, we need to talk about it and we’ve got the perfect intersection of precious metals and crypto: tokenised gold. Read on to get the lowdown on a sector that’s set to keep heading up and to the right.

💵 Smart Money Forecasts 💵

The ongoing institutional embrace of crypto is one of the big stories bubbling away beneath the surface. The biggest players in TradFi are making eyes at crypto and blockchain and, like it or not, they are going to shape the market in the future.

As such, it’s vital to know what the institutions are thinking and how they’re positioning themselves for the future. Among the biggest players in the space is Fidelity - one of the world’s largest asset managers, now with its own digital asset arm.

In today’s video, we break down a recent report from Fidelity which looks ahead to 2026 and how the firm sees crypto evolving over the year. From the growth of ETPs and derivatives to the reworking of tokenomics models and internal strife within Bitcoin, Fidelity’s outlook is one we need to be aware of as the year gets into its stride.

You can watch that video here.

📈 Crypto Market Forecast 📈

As is often the case, the virality of small cap stocks outperforming large cap stocks set the stage for a pullback in the Russell 2000, which materialized last week. And, as has been the case recently, the crypto market failed to catch a bid even when the S&P 500 hit a new all-time high of 7000. To add insult to injury, last week’s bullish crypto catalysts failed to support prices.

This frustrating state of affairs has led to a lot of theories, including unknown entities purposely suppressing crypto prices for unknown reasons. It could be as simple as long term BTC and ETH holders taking profits and more short term BTC and ETH holders rotating into other asset classes. However, the disconnect between crypto and other asset classes has been uncanny.

This disconnect has been highlighted by multiple macro analysts, some of whom have argued that it’s technically within a normal range. To their point, on-chain indicators suggest there has been significant accumulation of large cryptos like BTC and ETH over the last couple of months. The recent crash could therefore be marking the end of a multi-month accumulation by whales.

Circumstantial evidence for this can be seen in the fact that multiple high profile crypto projects are planning big announcements and developments over the next week or so. One example is MegaETH, an Ethereum layer 2 which raised $450 million late last year despite poor market conditions. Its main net will be launching on February 9th, hopefully under better conditions.

Another example is Fidelity, which will be launching a stablecoin on Ethereum soon. These announcements and developments coincide with the progress made on the regulatory front. The Senate Agricultural committee passed its draft of the CLARITY Act last week, and the SEC and CFTC signalled that they are ready to provide crypto guidance even if regulations aren’t passed.

That said, the Trump administration is planning on hosting a meeting between the banking industry and the crypto industry on Monday to try and get the CLARITY Act passed. Reports suggest that there will be a push to allow yield on stablecoins, which is presumably why Fidelity announced plans to launch its own. But again, there’s no guarantee this will boost the market.

For what it’s worth, the passing of the GENIUS Act last summer was the only crypto catalyst that caused the market to experience a big rally over the last year. Given that the CLARITY Act is a similar catalyst, it could have the same profound effect on prices as the GENIUS Act - assuming there is proper progress, which seems to be the case given all the announcements.

Meanwhile on the macro front, the main catalyst to watch this week is the unemployment data for January, which will be published on Friday. As some of you will know, US unemployment has been gradually rising in recent months. Layoffs in January following seasonal hiring in December should push unemployment higher than investors expect, and that’s not all.

As part of the unemployment print this Friday, the BLS will publish its annual revision for 2025. As some of you might have heard, short-term revisions had revised unemployment higher for many months in 2025. As such, there’s a high chance the yearly revision will show an even higher unemployment rate than expected. This would be supportive of more Fed easing and thus bullish.

On the geopolitical front, there’s a tug of war between the bearishness of escalation around Iran, and the bullishness of potential de-escalation around Ukraine. As you read this newsletter, the US, Russia, and Ukraine are holding their second round of trilateral meetings in the UAE. There haven’t been trilateral meetings about the war since 2022, shortly after it began.

In sum then, it looks like the upcoming week will be neutral for the crypto market, and could even be bullish depending on how all these catalysts play out. Consider that the average cost basis for the spot Bitcoin ETFs is around 80k. Many institutional investors also seem to see BTC as a good short-term trade since it’s so oversold. Taken together, it suggests a bounce is likely.

🪙 Tokenized Gold 🪙

Precious metals have been one of the best performing assets over the past year.

Since January 2025, both gold and silver have rallied over 113% and 320% respectively. Meanwhile, BTC recorded a mere 40% gain at its highest price in the past year.

It’s safe to say the crypto bros did not win this round. But that might soon be changing. As with anything popular, we’re co-opting gold as one of our own by tokenising it on the blockchain. Now, tokenised gold has been around for a while – both Paxos and Tether (the two biggest players in the niche) have had their gold products for nearly six years now.

That said, until last year, the adoption of their tokenised gold products was anything but impressive. Only in the past eight months has the market cap of tokenised gold tokens gone parabolic, rising from a total of $1.4 billion to $5.5 billion at the time of writing. This is impressive, even after discounting gold's rally during this time.

To put it bluntly, crypto investors are more excited about buying tokenised gold than ever before. The same is true for issuers, and we’ve seen a few new issuers enter the tokenised gold market in 2025 and 2026 – including a sovereign country (Bhutan).

This rapid adoption is doubtless a good thing. But, it has us wondering what had changed to cause such a sudden spike in just eight months.

Sure, gold is the trade of the year, and many investors want a piece of the action. But that still doesn’t explain the parabolic rise in market cap for tokenised gold. After a bit of digging though, we found the answer – and it might be the single biggest investment case for tokenised gold over other forms of paper/virtual gold like ETFs.

Before we reveal the answer, it’s important to quickly understand why precious metals have been rallying.

You see, the current precious metal rally is mostly driven by a flight to safety. As geopolitical tensions have continued to rise in recent years, an increasing number of central banks have been accumulating physical gold at an accelerated pace – often from vaults located in other countries. This in turn causes a supply bottleneck for physical gold, creating a bigger premium in the spot price of markets with physical delivery.

At the same time, the booming rise of global debt has the average retail investor worried about currency debasement and fiscal stress – creating additional demand for gold which is considered a safe haven asset.

While most retail investors looking to purely profit from this price rally have typically used exchange-traded funds or derivative positions in traditional financial markets to do so, tokenised gold has recently become more recognised as a safer and better way to paper trade the asset.

We’ll explain why.

The most obvious reason is that tokenised gold offers better accessibility and fewer costs. While ETFs are only traded during regular market hours, tokenised gold can be bought and sold 24/7/365. Investors can also purchase fractions of tokenised gold tokens, while ETF shares are traded whole. ETFs also have several restrictions when it comes to the redemption of the shares for the underlying asset. Not to mention the annual storage and maintenance costs imposed by ETF issuers.

However, the most significant investment case for tokenised gold over ETFs is the difference in ‘intermediary dependence’ between them.

You see, there’s evidence that much of the world’s gold trade is run on a fractional reserve system. Most gold ETF issuers issue shares against gold collateralised in bullion banks (HSBC, JP Morgan, etc). These bullion banks use delta-neutral hedges to sustain paper demand far above the pool of physical gold in their custody. In principle, this hedging strategy assumes that futures can substitute for physical delivery.

In a rally driven by physical demand, there’s a very real threat that these hedges could collapse, causing market stress and bankruptcies. Not to mention, there’s growing concern about the credibility of these bullion banks due to their limited transparency around their gold reserves. This makes ETFs and traditional paper gold products riskier than their physical counterparts – especially as the number of intermediaries in these financial products scales up.

This is where tokenised gold sets itself apart. Most tokenised gold issuers claim to specifically maintain vaults where every token issued is backed 1:1 with physical gold - specifically allocated physical gold (gold that is held by dedicated custodians but segregated from common pools and registered in the name of the issuer).

The best part is that the two biggest issuers, Tether and Paxos, offer transparency measures where institutional clients can verify the individual serial number of the gold bars backing their tokenised representations. Between the two, Tether offers a lower direct minting threshold for its gold token. It is also currently the largest known private holder of physical gold, outside of nation states and banks. We believe this has seriously bolstered the credibility of the tokenised gold sector. While there's nothing better than physical gold, in a world built around convenience and consumer confidence, we can reliably expect the tokenised gold industry to continue growing exponentially in the years ahead.

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🔮 Video Pipeline 🔮

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📖 Quote of the Week 📖

The current market conditions are some of the toughest we have seen. But, in these challenging times, it’s those with the fortitude to march ahead who will reap the rewards in the next bull market.

“Hard times create strong men. Strong men create good times.” - G. Michael Hopf

Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.