## End of an era? The 1.5 billion in tokenized gold challenge Bitcoin's dominance

The flood of capital into safe-haven assets is redefining the investment landscape. With $1.5 billion flowing into tokenized gold, an uncomfortable question arises: Is Bitcoin losing its appeal, or is it simply repositioning itself in a more conservative market?

## Why tokenized gold is growing while Bitcoin stagnates

The digital gold ecosystem has transformed remarkably. PAXG, the leading gold-backed token, has an approximate circulation of $1.5 billion, significantly surpassing the volumes recorded in 2023 and the early weeks of 2024, according to Token Terminal analysis.

This growth is no coincidence. Investors are discovering in tokenized gold an attractive middle ground: instant access without traditional financial intermediaries, immediate settlement, and uninterrupted operation. Unlike physical bars or conventional ETFs, the blockchain version offers flexibility and speed while maintaining the security perception provided by precious metal.

Demand responds to a specific context. With macroeconomic uncertainty and persistent volatility in digital markets, sophisticated investors opt for hybrid instruments that combine gold’s stability with blockchain efficiency.

## Bitcoin lagging: real weakness or misinterpretation of historical cycles?

While gold accumulates gains, Bitcoin maintains a defensive stance. The Bitcoin/gold ratio has reached levels that historically coincided with cycle lows. But here begins the debate.

Michael Van de Poppe, a renowned crypto market analyst, diagnoses a valuation distortion rather than a definitive capital withdrawal: "One is overvalued, the other undervalued. My analysis suggests that gold has inflated its price, while Bitcoin remains lagging." This perspective suggests that the current rotation could be temporary—a cyclical adjustment common in reserve asset markets.

Historical data support this thesis. In previous cycles, when the Bitcoin/gold ratio compressed, the crypto asset rebounded vigorously even as demand for gold slowed down. This implies that Bitcoin’s current weakness could be relative, not structural.

## Long-term view: defending Bitcoin from the fundamentals

Bitcoin advocates argue that the timeline defines the conclusion. Matthew Kratter, a highly convinced Bitcoin analyst, emphasizes structural factors ignored in short-term analysis: "Gold supply grows only about 1-2% annually over decades. Transporting and securing large volumes is prohibitively costly, limiting its usefulness for resolving global trade imbalances."

These arguments suggest that although gold leads at the moment, Bitcoin’s characteristics as a frictionless decentralized value network remain valid over extended timeframes.

## Regime change or tactical pause?

The fundamental question remains unresolved: does this shift toward tokenized gold represent a permanent reconfiguration of investment preferences, or a transient phase within a broader cycle?

The answer will depend on how market participants redefine "security" in a digitized financial ecosystem. For now, gold wins the short-term battle with solid prices and selective risk appetite. But Bitcoin’s structural arguments regarding scalability and supply dynamics remain relevant for longer horizons.

With Bitcoin trading around $90.67K, the Bitcoin/gold spread remains the critical indicator to monitor. Past cycles suggest that when this gap compresses to its maximum, rebounds of the main crypto asset tend to be significant.