Morning Minute: Gold Soars Toward $5,600; Bitcoin Falls

Morning Minute is a daily newsletter written by Tyler Warner. The analysis and opinions expressed are his own and do not necessarily reflect those of Decrypt. Subscribe to the Morning Minute on Substack.

GM!

Today’s top news:

• Crypto majors fall despite neutral FOMC; BTC at $87,800
• Hyperliquid’s HIP-3 does $2B+ in volume as Gold & Silver hit ATH
• The White House pushed for a meeting with Banks/crypto firms to broker deal on Clarity Act issues
• Fidelity announced its own stablecoin FIDD on Ethereum
• MegaETH teased its mainnet (and token) launch for Feb 9

🟡 Gold Surges Toward $5,600 Per Ounce

Gold is soaring. Digital gold, not so much. Will that trend continue?

📌 What Happened

Gold prices climbed sharply on Wednesday, setting new ATHs and approaching $5,600 per ounce.

It is now up over 27% on the year (28 days) and up ~100% on the year.

Several factors are driving the rally, including geopolitical tensions, a weaker U.S. dollar, and speculation that central banks including the Federal Reserve may shift toward more monetary easing.

Meanwhile, stablecoin issuer Tether has aggressively expanded its physical gold holdings, now estimated at around 140 tonnes valued at roughly $23B, making it one of the largest non-sovereign gold holders in the world.

CEO Paolo Ardoino has said Tether plans to continue adding to its gold reserves as part of a diversification strategy and to bolster backing for USDT and its gold-linked token XAUt.

🗣️ What They’re Saying

“We are soon becoming basically one of the biggest, let’s say, gold central banks in the world,.” – Paolo Ardoino, Tether CEO

🧠 Why It Matters

This gold surge is likely a combination of flight to safety amidst geopolitical tension, reactions to a weakening dollar and a result of China plowing capital into it vs any other asset.

But the scale of this move is unprecedented.

To frame the scale:

• The total market cap of gold is roughly $37T
• The total market cap of Bitcoin sits nearer $1.8T

Gold’s 5%+ move on Wednesday effectively added the entire market cap of Bitcoin in a single day.

We’re so early.

But the multi-trillion dollar question is now—what could trigger rotation between gold and Bitcoin?

A few scenarios:

1. Renewed monetary expansion: If the Fed explicitly launches large-scale balance sheet expansion, gold and Bitcoin could both benefit, but crypto’s higher beta may outperform as capital seeks return.
2. Stress in bond markets: Surging yields or losses in sovereign bonds can propel gold; if that stress spills into credit or equity markets, Bitcoin could reassert its role as an uncorrelated hedge.
3. Shift in investor psychology: Gold has all the momentum right now—but eventually it won’t. And Bitcoin may become attractive simply due to the fact that it hasn’t pumped nearly as much as Gold.

It’s hard to predict if and when that rotation will happen.

But if it does, the impact to Bitcoin will likely be swift and violent.

🌎 Macro Crypto and Markets

A few headlines that stood out:

• Crypto majors are red following a neutral FOMC; BTC -2% at $87,800; ETH -3% at $2,930, SOL -4% at $123; XRP -3% to $1.86
• Stable (+18%), PAXG (+5%) and WLD (+4%) led top movers
• Gold hit another new ATH at $5,600, adding the entire market cap of Bitcoin in the process
• The White House announced a meeting with banks and crypto firms to broker a compromise on stalled crypto legislation (the Clarity Act), focused on stablecoin yields and deposit competition
• Tether’s CEO said the stablecoin issuer will keep adding to its ~$24B gold reserves to diversify backing and support asset-linked tokens
• JPMorgan and Citadel met with the SEC to discuss plans for tokenized securities and DeFi projects
• South Dakota lawmakers reintroduced a bill to allow the state to invest funds in Bitcoin
• Fidelity announced plans to introduce a digital dollar stablecoin on Ethereum, aimed at enterprise and consumer use under regulatory frameworks
• Gemini launched a Zcash credit card that pays users rewards in ZEC on everyday purchases, expanding crypto payment utility.

In Corporate Treasuries / ETFs

• The BTC ETFs saw $19M in net outflows on Wednesday; ETH ETFs saw $28M in inflows

In Memes / Onchain Movers

• Meme majors were red dow 4-7%; Doge -4%, Shiba -4%, PEPE -5%, TRUMP -3%, Bonk -4%, Pengu -7%, SPX -8%, WIF -7% and Fartcoin -7%
• WhiteWhale (+30%), WAR (+48%), BP (+50%), FOX (+67x) Soulguy (+110x) and Donald (+38x) were notable onchain movers

💰 Token, Airdrop & Protocol Tracker

• Hyperliquid’s HIP-3 saw its first $2B day of volume on the back of the gold and silver moves
• OpenAI is reportedly exploring a social network with Worldcoin, envisioning a biometric, humans-only social platform using proof-of-personhood tech
• Coinbase launched its prediction market, Coinbase Predicts, on Wednesday
• Moonbirds BIRB token doubled to $420M+ fdv in its debut on Wednesday before retracing to $277M (+29% on day)
• MegaETH teased its mainnet launch (and TGE) for Feb 9
• Coinbase announced it would finally list HYPE for trading

🚚 What is happening in NFTs?

• NFT leaders were very red; Punks even at 28.4 ETH, Pudgy -7% at 4.16 ETH, and BAYC -6% at 5.5 ETH; Hypurr -7% at 505 HYPE
• Moonbirds fell another 10% to 0.935 ETH after the BIRB token debut
• Biome Lumina was the top mover, up 35%
• A Skull of Luci sold for 400,000 USDC
• Pudgy Penguins launched Manchester City collectibles