Bitcoin Nears $90K, But 'Smart Money' Bets on Gold Tokens Amid Institutional Retreat

Bitcoin rallied to $89,800 on Monday as the dollar weakened, but the real story may be the record highs set by gold-backed tokens, signaling a deep-seated investor caution that belies the crypto market's surface-level gains. While retail enthusiasm seems present, institutional capital is quietly heading for the exits.

As physical gold surged to a new peak, digital proxies followed suit. Tether Gold (XAUT), the largest gold-backed token by market value, climbed to an all-time high of $4,425, according to CoinDesk data. The rally, which also included tokens like PAXG, pushed the sector's total market capitalization to $4.38 billion.

"The message is clear. Investors are still hedging macro uncertainty rather than leaning aggressively into risk," said Timothy Misir, head of research at BRN, in an email. "That divergence continues to cap enthusiasm for crypto, even as liquidity conditions improve."

Bitcoin's ascent was largely tied to broader market trends. A drop in the U.S. dollar index and a rally in Asian technology stocks, led by chipmakers like Taiwan Semiconductor and Samsung, provided a favorable backdrop. However, this macro-driven lift contrasts sharply with cooling institutional sentiment.

The derivatives market reinforces this cautious narrative. On the CME, a key venue for institutional traders, open interest in Bitcoin futures dropped below 120,000 BTC for the first time since early 2024. Meanwhile, a rise in leveraged long positions on the Bitfinex exchange—a trend historically associated with bear markets—points to speculative retail activity rather than institutional conviction.

Internal governance challenges are also adding to market jitters. Curve DAO, which governs the major decentralized exchange, voted down a proposal to allocate 17.45 million CRV tokens (worth roughly $6.3 million) to its core development team. The proposal failed with 54.46% voting against it, led by DeFi heavyweights Yearn Finance and Convex Finance, who cited a lack of transparency over past expenditures.