The Digital Assets Memo: Bitcoin standard vs. Gold standard - the finale
Executive Summary
Bitcoin vs. Gold: The Debate
Bitcoin's underperformance vs. Gold in the last 12 months has sparked a debate whether the 'digital gold' thesis holds. We share our perspectives on this debate and why we believe, the current drawdown maybe the last opportunity before Bitcoin elevates to a sovereign asset comparable to gold.
The Bitcoin market cap as % of Gold market cap is close to its 2 year low given the recent underperformance. Since 2021, Bitcoin as a percentage of Gold has oscillated between 2% to 11%. This volatility has been exacerbated by strong buying of Gold by central banks.
China has accelerated its acquisition of Gold in recent years. Similarly, India's Reserve bank has also accelerated its Gold buying. Share of gold in central bank reserves has increased from 9% to 29% in the last 10 years, almost doubling in the last 2 years.
| Asset | CY25-26 YTD | 5yr CAGR | 10yr CAGR |
|---|---|---|---|
| Bitcoin (BTC) | -19% | +25% | +70% |
| Gold | +70% | +18% | +15% |
"We realize this sounds like a long shot, but we view the current geopolitical game theory requires U.S to disrupt the rise of Gold as an alternative to U.S treasury within central bank reserves."
U.S Policy Alignment
The GENIUS Act has been adopted to legitimatize U.S dollar stablecoin to reinforce U.S dollar as the global standard in the digital economy. U.S dollar stablecoins today stand close to $300Bn driving demand for U.S treasury as collateral.
The Trump administration is deeply aligned with the crypto industry as its political supporter and sees weaker digital asset markets as an index of popularity with its core supporters. If the Bitcoin decline relative to Gold continues, we expect the administration to step in with policy support including acceleration of the Digital assets market structure bill (Clarity Act).
We just don't see a passive U.S government if the digital asset markets keep sliding.
Institutional Flows Remain Resilient
Strategy (MSTR) maintains a 'fortress' balance sheet with over 30 months of cash cover and no debt redemptions due until 2028. The current Bitcoin market price being close or even lower than MSTR's cost basis ($76K), the liquidity profile and ALM of MSTR's balance sheet involves no material liquidation risk.
MSTR continues to maintain strong ability to tap equity markets and preferred instruments, still buying Bitcoin through the drawdown - has acquired $3.8bn Bitcoin YTD. ETF outflows since peak AUM (as of October 2025) represent ~6% of current AUM (~40% correction in Bitcoin since peak).
| Company | BTC Holdings | Value ($Mn) | Capital Inflow YTD ($Mn) |
|---|---|---|---|
| MSTR (Strategy) | 712,647 | 53,979 | 26,220 |
| Twenty One Capital | 43,514 | 3,296 | 3,800 |
| MetaPlanet | 35,102 | 2,659 | 3,640 |
| Strive | 13,132 | 995 | 1,390 |
| Trump Media & Tech | 11,542 | 874 | 1,370 |
| Tesla | 11,509 | 872 | - |
| GameStop | 4,710 | 357 | 500 |
Bitcoin Spot ETF Flows
Unlike previous Bitcoin cycles, there is no significant leverage led capitulation of Bitcoin miners. The AI data center demand has diversified their revenues from Bitcoin revenues although they may be contributing to the current sell pressure.
| Ticker | Issuer | Flows YTD ($mn) | Total Flows ($mn) | Assets ($mn) | BTC Held (K) |
|---|---|---|---|---|---|
| IBIT | BlackRock | (137) | 61,956 | 64,275 | 774 |
| FBTC | Fidelity | (842) | 11,405 | 16,091 | 194 |
| GBTC | Grayscale | (450) | (25,704) | 13,373 | 161 |
| ARKB | 21Shares / ARK | (151) | 1,471 | 3,016 | 36 |
| BITB | Bitwise | (61) | 2,059 | 3,154 | 38 |
| Total | - | (1,585) | 55,070 | 106,957 | 1,287 |
How to Navigate Crypto Stocks
Direct crypto linked stocks are high beta to crypto prices. Trading driven businesses such as COIN, HOOD, BLSH may be the most impacted. However, HOOD has more levers to offset crypto revenues via equities, prediction markets and its non-trading revenues.
COIN is along the same path of diversifying crypto revenues via stocks and prediction markets, but remains early in its journey. Within our coverage, FIGR (Best idea) is the most immune to crypto price action and remains a structural tokenization platform play (relative defensive play within our coverage).
Bitcoin miners remain AI proxies and thus may continue to see price action linked to AI deals and execution towards realized AI revenues vs contracted.
| Ticker | Rating | Price ($) | Target ($) | 30d Return | YTD Return |
|---|---|---|---|---|---|
| CLSK | O | 11.84 | 24.00 | +3% | +17% |
| RIOT | O | 15.47 | 25.00 | +9% | +22% |
| IREN | O | 53.74 | 125.00 | +26% | +42% |
| CORZ | O | 17.99 | 24.00 | +13% | +24% |
| HOOD | O | 99.48 | 160.00 | -14% | -12% |
| COIN | O | 194.74 | 440.00 | -18% | -14% |
| MSTR | O | 149.71 | 450.00 | -5% | -1% |
| CRCL | O | 63.93 | 190.00 | -8% | -1% |
| FIGR | O | 56.88 | 72.00 | +30% | +39% |
| BLSH | M | 30.20 | 50.00 | -23% | -20% |
| MARA | M | 9.50 | 23.00 | -4% | +6% |
| SBET | O | 8.88 | 24.00 | -23% | -19% |
O = Outperform, M = Market-Perform. As of January 30, 2026.
Key Questions & Analysis
Investment Recommendations
- Buy the Dip: Current market weakness may again offer attractive entry points for crypto equities, if you believe in our long term view of a sustained digital asset cycle and mainstream adoption of blockchain for financial services.
- FIGR - Best Idea: Figure is our top pick for 2026 as a structural tokenization platform play that is most immune to crypto price action. PT $72 with ~38% potential upside.
- IREN - AI Play: Among Bitcoin miners within our coverage, IREN is breaking out from the group with its AI cloud vertical. PT $125 with significant upside potential.
- HOOD & COIN: Long Crypto bull market continuing into 2026-27. We see plenty of upside across HOOD (PT $160), COIN (PT $510), CRCL (PT $230).
- MSTR Resilience: Strategy maintains a 'fortress' balance sheet. We remain convinced market concerns on Strategy are over-stated, given its over-collateralised balance sheet. PT $450.
Key Risk Factors
Prolonged Bear Market: If macro conditions deteriorate further or regulatory clarity is delayed, the crypto bear cycle could extend beyond H1 2026, impacting our price targets.
Policy Reversal: Changes in U.S. administration's stance on digital assets or delays in passing the Clarity Act could negatively impact institutional adoption.
Gold Outperformance: Continued central bank preference for gold over Bitcoin could challenge the "digital gold" narrative and delay Bitcoin's elevation as a sovereign asset.
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