Author: Axel Bitblaze, Compiler: Block unicorn

Foreword

Gold just had its worst day since the 1980s. Silver plunged more than 30% in a matter of hours, posting its worst single-day move in 45 years. Precious metals markets lost about $3 trillion in value in a single trading day.

Meanwhile, Bitcoin prices have stabilized above $80,000 and are currently at $82,000. Although it fell, it did not collapse. (However, as of the time of publication, the price of Bitcoin has fallen below US$80,000, and once fell to around US$77,000.)

This article will provide an in-depth analysis of the ins and outs of the event, its importance, and the future direction revealed by the data. There is no blind optimism or alarmism, just data.

Core argument: We may be witnessing the beginning of a capital rotation event that will reshape institutional funds’ views on “safe-haven assets,” and Bitcoin is expected to take a share of the pie. But the path to that goal is far more complicated than the crypto Twittersphere admits.

Part 1: The beginning and end of the incident

Data Overview

On January 30, 2026, precious metals experienced a crash that will be studied in financial textbooks for decades to come.

Gold:

• Plummet from all-time high $5,600 to $4,718

• 12% drop in one day

• Worst one-day drop since early 1980s

• The intraday decline even exceeded the decline during the 2008 financial crisis

Silver:

• Plump from $120 to $75-78

• 30-35% drop within hours

• Worst single-day performance since March 1980 (the era of the Hunter brothers)

• Almost wiped out all gains in January

Platinum: down 24%

Palladium: down 20%

To put this decline into perspective: The gold market lost about $3 trillion in value in a single trading day...if you add gold and silver's losses together, that's more than $8 trillion.

The following are the GDP reference values of each country:

1. United States: $30.5 trillion

2. China: $19.2 trillion

3. Germany: $4.7 trillion

4. India: $4.2 trillion

5. Japan: $4.2 trillion

Silver has been more volatile. Only traders who lived through the Hunt Brothers crash can appreciate a similar scene.

Triggers

The immediate catalyst is President Trump’s nomination of Kevin Warsh to succeed Jerome Powell as the next Federal Reserve Chairman in May 2026.

The market initially interpreted Wash as a hawkish pick. His resume includes:

• Served as a Governor of the Federal Reserve Board from 2006 to 2011

• During his tenure, he has been one of the most hawkish members of the Federal Open Market Committee (FOMC)

• Voted against the second round of quantitative easing (QE2) in 2010

• Called for "regime change" at the Federal Reserve

• Advocate a significant reduction in the Fed’s balance sheet

The U.S. dollar soared after the news was announced. Normally, a stronger dollar leads to a weaker gold, but this move was well above normal.

What's really happening: The precious metals rally has overheated. Gold prices rose 18% in January alone. Silver is up over 40% year to date. Wash's statement was not the direct cause of the decline, but merely an excuse for the market to take profits.

“It’s just crazy,” said Miller Tarbuck’s Matt Marley. "This is most likely a forced sell-off. A lot of leverage has accumulated in the silver market. As prices plummeted, so did the margin calls."

反馈循环：杠杆多头被追缴保证金 → 强制抛售 → 价格暴跌 →  更多保证金追缴 → 更多强制抛售。 We’ve seen this playstyle before in the cryptocurrency space. Gold and silver are also suffering today.

Part 2: Macro Background

Why did gold rise so sharply before?

To understand the significance of this plunge, we first need to understand what is driving this rise.

Central Bank Purchases:

• In 2025, central banks will purchase a total of 863 tons of gold

• Having purchased more than 1,000 tons of gold for three consecutive years (2022-2024)

• Poland alone has purchased 102 tons of gold, and the current goal is to increase the proportion of gold reserves to 30%

• The total gold reserves of central banks now exceed US$4 trillion

• For the first time since 1996, central bank gold holdings exceeded U.S. Treasury bond reserves

De-dollarization:

• The U.S. dollar’s share of global foreign exchange reserves has dropped from 70% in 1999 to 58% in 2024

• In 2022, the United States froze more than $300 billion in Russian foreign exchange reserves, triggering concerns among non-aligned countries

• Since 2018, China has been steadily reducing its holdings of U.S. Treasury bonds

• Gold provides “jurisdiction risk” protection that Treasury bonds cannot provide

U.S. fiscal situation worsens:

• National debt reaches $38 trillion

• The debt-to-GDP ratio is as high as 122%, a record high since World War II

• Debt interest payments will exceed $1 trillion in 2026

• The Committee for a Responsible Federal Budget warns of six potential crisis scenarios

Geopolitical Chaos:

• Escalating tensions between the United States and Iran

• Uncertainty of trade war

• Concerns about government shutdown

• Greenland/Arctic Tensions

• The situation in the Middle East is unstable

The rise in gold prices stems not from speculation but from genuine concerns about the stability of the existing financial order. The over 1,000 tons of gold purchased by central banks every year are not for speculative purposes.

The “safe-haven asset” issue

Interesting.

The whole value proposition of gold is that it is the ultimate safe haven, an asset you hold in times of chaos, a store of value that can last 5,000 years and transcend empires.

Now, however, this narrative is self-defeating.

If your “safe-haven asset” drops 12% in one day, and silver drops 30%, what exactly are you hedging?

The cryptocurrency community has been making this point for years. Gold advocates always respond: "Bitcoin is down 80% in the bear market, and gold is stable."

Okay.

Bitcoin has fallen 30% in four months from its all-time high of $126,000 in October. Gold fell 12% in four hours.

Silver’s single-day fluctuations even exceed those of Bitcoin. So think about it.

Does this mean gold is no longer a store of value? No. Gold has experienced five thousand years of monetary evolution, and it can still withstand this test.

But it does challenge the notion that gold is immune to “speculative” asset moves. When leverage accumulates, and when positions become overcrowded, even the world's oldest currencies can fluctuate like crapcoins.

Part 3: Where does the money go?

Rotation theory

Fundstrat’s Tom Lee has been outspoken: Gold and silver have been “sucking the oxygen out of all assets,” including cryptocurrencies.

The logic is simple. There is a limited pool of capital seeking to hedge the following risks:

• Inflation

• Currency devaluation

• Geopolitical risks

• Fiscally irresponsible

In 2025, the vast majority of this capital will choose gold. Result:

• Gold: Up 66% in 2025

• Silver: Up 135% in 2025

• Bitcoin: Down 7% in 2025

Yes, Bitcoin fell throughout the year, while gold nearly doubled.

Institutional capital, which would normally view Bitcoin as a portfolio diversification tool, has instead turned to the more "safe" precious metals trade. Every dollar flowing into a gold ETF means one less dollar flowing into a Bitcoin ETF.

The data confirms this:

• Bitcoin ETFs lost $4.57 billion between November and December 2025, marking their worst two-month performance ever.

• Over the same period, gold ETFs have seen record inflows.

• Institutional investors have made it clear that they prefer the "stability of physical gold" to the volatility of cryptocurrencies.

But here’s the thing about rotation: it works both ways.

Historical Mode

Bitwise Europe’s André Dragosch documents a consistent lag pattern between gold and Bitcoin’s rise. Using the Granger causality test, he found that gold tends to lead Bitcoin by 4-7 months.

The mechanism is as follows:

1. Crisis/uncertainty appears

2. Capital immediately flowed to gold, viewing it as a safe-haven asset

3. Gold rises, Bitcoin lags

4. 一旦黄金企稳或回调，资本转向更高贝塔系数的替代资产

5. Bitcoin catches up with leverage effect

This pattern has occurred during the following periods:

• The impact of the new crown epidemic in 2020: Gold rose first, and Bitcoin followed a few months later

• Banking Crisis 2023: Gold surges immediately, Bitcoin lags, then outperforms

• Late 2025: Gold goes parabolic, Bitcoin stalls... rotation coming?

If this pattern continues, gold's sharp correction may become a catalyst for capital to re-examine Bitcoin.

Paul Howard of trading firm Wincent said bluntly: "The cryptocurrency market has been a victim of venture capital inflows into the still-hot commodity trade. This dynamic may now be changing."

What is the options market saying

An interesting data point: Even though Bitcoin prices are near yearly lows, options traders are still going long, betting on its rise.

The most actively traded contract right now is the February call option with a $105,000 strike price. Some January calls with a $100,000 strike price have been rolled over to March calls with a $125,000 strike price... Traders extended the duration of the trade but raised their price targets.

This can lead to what's called "gamma squeezing." As spot prices approach these strike prices, market makers who sell these calls are forced to buy Bitcoin to hedge. This buying pressure creates a feedback loop that quickly pushes prices higher.

The options market isn't always right, but it's where sophisticated capital makes bets that prices will rise.

Part 4: Catalyst

Kevin Walsh: It’s not what you think

The market's initial reaction viewed Wash as a hawk. The dollar soared, gold plunged and risk assets sold off.

But upon closer analysis, you will find that the situation is more complicated.

Yes, Wash is historically a hawk. In 2009, at the height of the financial crisis, unemployment was as high as 9% and inflation was just 0.8%. He was worried about inflation at the time and voted against the second round of quantitative easing (QE2). He also called for a significant reduction in the Fed's balance sheet.

But for 2026, the following points are crucial:

Wash has recently issued a more dovish signal, arguing that the productivity improvements brought about by artificial intelligence mean interest rates can be lower than those predicted by traditional models. Trump wouldn't have nominated him if he didn't have some consensus on cutting rates.

“We view Warsh as a pragmatist rather than an ideological hawk,” said Evercore’s Krishna Guha. “Because he has a reputation as a hawk and is seen as an independent, he is more likely to get the FOMC to align with him and cut rates at least twice and possibly three times this year.”

The market currently expects 2-3 interest rate cuts in 2026. Warsh taking over as Fed chairman in May will not change this trend, and may even speed up the rate cuts if he wants to prove he is not a "Trump puppet."

Rate cuts = more liquidity = historically good for Bitcoin.

Debt spiral

This is the elephant in the room that no one wants to discuss candidly.

The U.S. national debt currently stands at $38 trillion. By 2026, interest payments will exceed $1 trillion. That's more than the entire defense budget. Roughly equivalent to Medicare spending.

Ray Dalio has been sounding the alarm for years. His latest view is: "My descendants, and even my great-grandchildren who haven't been born yet, will use devalued dollars to pay off this debt."

History shows that when a country accumulates such huge debts, they rarely resolve them through spending cuts or hard defaults. They usually solve the problem by devaluing the currency and issuing more currency.

This is the fundamental reason to be optimistic about gold and Bitcoin. They are all “external currency” assets that central banks cannot print money.

Gold has just proven that it is not immune to sharp market corrections. Bitcoin has always been volatile. But both represent questions about the sustainability of the current monetary order.

The Committee for a Responsible Federal Budget lists six potential crisis scenarios:

1. Financial crisis (market crash)

2. Inflation crisis (the Fed is forced to monetize debt)

3. Austerity crisis (forced spending cuts)

4. Currency crisis (the US dollar loses its reserve currency status)

5. Default crisis (unable to repay debt)

6. Progressive crisis (slow decline in living standards)

We are likely to face some combination of these six crises. And in each scenario, whether gold or Bitcoin, the hard asset will be more attractive relative to the promise of being denominated in fiat currency.

ETF fund flow dynamics

The situation with spot Bitcoin ETFs is often misunderstood.

Yes, there were massive outflows in late 2025. There were $4.57 billion in outflows between November and December. This may sound disastrous.

But context is important:

• A large part of this is tax loss harvesting at the end of the year

• Three funds accounted for 92% of outflows

• BlackRock's IBIT fund continues to see inflows even as other funds lose money

• New capital inflows hit $1.1 billion in first week of January 2026

ETF infrastructure is not gone. In fact it has matured significantly:

• Institutional custody solutions are very robust

• Regulatory clarity has improved

• Financial advisor education programs are expanding

What has changed is the orientation of public opinion. In 2024, ETFs are the hot new thing; in 2025, gold is the hot new thing. Fund flows in ETFs are affected by market movements, which can change rapidly.

Standard Chartered Bank's view: "The strategic significance of Bitcoin allocation still exists. What has changed is the timing, not the theory."

Part 5: Price Scenario

Consensus view

I have compiled forecasts from major institutions and well-known analysts. Here's what they have to say about 2026:

Bullish Scenario ($150,000 to $225,000):

• Standard Chartered Bank: US$150,000 (previous forecast was US$300,000)

• Bernstein: Reach US$150,000 by the end of 2026

• Maple Leaf Financial: US$175,000

• Nexo: US$150,000 to US$200,000

• JPMorgan Chase: $170,000

• FundStrat (Tom Lee): $200,000 to $250,000

Baseline scenario ($110,000 to $150,000):

• Carol Alexander (University of Sussex): $75,000 to $150,000 range, center at $110,000

• CoinShares: $120,000 to $170,000

• Citigroup: Base case $143,000, Bullish $189,000

• Polymarket: 45% probability of reaching US$120,000, 21% probability of reaching US$120,000 to US$150,000

Bearish scenario ($60,000 to $80,000):

• Fidelity (Jurrien Timmer): If the cycle runs normally, support is at $65,000-$75,000

• Peter Brandt: There is a 25% probability of a sharp correction to $55,000-$57,000

• Fundstrat (Sean Farrell): If support fails, it may fall to $60,000-$65,000 in the first half of the year

My opinion:

The consensus price target for 2026 is around $120,000-$150,000. This represents a 45% - 80% increase from current levels. While not as dramatic as predicted in early 2025, it is not doom and gloom either.

Key price points that need attention

• $80,000: Major psychological support level. This price has been held many times. If this level is breached on volume, $74,000 and $65,000 would be the next targets.

• $100,000: Psychological Resistance Level. If this level can be regained, market sentiment will change significantly.

• $112,000: Ascending triangle breakout target based on current consolidation pattern.

• $126,000: Previous all-time high. A break above this level would confirm the entry into a new bull market phase.

Based on the data, I think the most reasonable prediction scenario is as follows:

Short term (February-March): Prices continue to fluctuate between $78,000 and $95,000. Gold/silver volatility needs to calm down. The Wash confirmation process creates uncertainty. A retest of the $80,000 support is possible.

Second Quarter 2026 (April-June): Wash will start in May. If rate cuts materialize, liquidity will return. Prices could top $100,000 to $115,000. If the lagging pattern persists, the gold-to-BTC rotation may accelerate by then.

H2 2026: Dependent on macroeconomic conditions. If the Fed cuts interest rates 2-3 times and the dollar weakens, prices could reach $130,000-$150,000. If macroeconomics deteriorate faster than expected (e.g. recession, credit crisis), Bitcoin may initially sell off along with other assets before decoupling.

Let’s be honest: no one knows. The likelihood of the outcome is very high. Position allocation should reflect this uncertainty.

Part 6: Risk

Why this argument may be wrong

1. Gold rebounds, rotation will never happen

The plunge in the past two days may be an opportunity to buy gold, rather than a change of status. Central banks remain net buyers. Geopolitical risks have not disappeared. Structural support for gold remains.

If gold stabilizes and resumes its upward trend, funds that "should" move to Bitcoin may simply continue to hold gold. The rotation theory requires gold prices to consolidate or fall over an extended period of time.

2. Bitcoin fails to decouple

In violent risk aversion events, Bitcoin has never continued to play the role of a safe haven asset. It usually sells off with the stock and then rebounds faster.

If a broader market crash, recession, credit crisis, or geopolitical crisis escalates, Bitcoin is likely to plummet along with other assets. The “digital gold” narrative has yet to be proven in a real stress test.

Counterargument: Bitcoin doesn’t need to be a safe-haven asset to outperform. It only needs to attract a portion of the capital seeking alternatives to traditional assets.

3. Regulatory/political risk

The U.S. regulatory environment has improved, but it is not foolproof. Scandals, major hacks, or political changes can quickly change the market landscape.

The impact of the Federal Reserve's policy adjustments on cryptocurrencies is generally considered to be neutral to positive, but the Federal Reserve's policy will affect Bitcoin indirectly through liquidity conditions. If inflation accelerates again and the Fed is forced to raise rates rather than cut them, everything will become unpredictable.

4. The four-year cycle is not dead

Many analysts believe that Bitcoin’s traditional halving cycle, which peaks 12-18 months after the halving and then falls back by 80%, is still valid.

The April 2024 halving will push the cycle peak to around the end of 2025. By that logic, we may already be in the early stages of a bear market, with October's high of $126,000 being the top.

Counterargument: ETF-driven institutional demand has changed market structure. Cycles that rely on retail speculation may no longer apply.

But until the final result comes out, we won’t know who is right and who is wrong.

5. Factors we haven’t considered yet

The biggest risks are always those for which no one has a price. For example, the threat of quantum computing to Bitcoin encryption technology; the collapse of large stable coins; black swan geopolitical events.

Position sizing should always take into account unknown unknowns.

Part 7: Position Configuration

How to think about this problem

I am not a financial advisor. This is also not financial advice. But the framework is as follows:

If you already hold Bitcoin:

• Today’s gold plunge will not change Bitcoin’s fundamentals

• The support level of $80,000 is the key level to watch

• If your leverage is too high, today’s market reminds you that volatility goes both ways

• The rotation theory is promising, but not inevitable

If you are considering entering the market:

• It is not wise to rush into the market just because "gold plummets and Bitcoin will rise"

• Data suggests a rotation is possible, but timing is uncertain

• When volatility is high, fixed investment is better than one-time investment

• Be prepared for a possible pullback of $74,000 to $80,000

If you own gold/silver:

• The market conditions in the past two days are painful, but they do not negate the logic of long-term investment

• Central banks are still buying

• The financial situation is still deteriorating

• Consider whether your position size matches the current volatility

From a broader perspective:

Both gold and Bitcoin are betting on the same basic logic: the current monetary order is unstable and hard assets will overperform in the long term.

They are not mutually exclusive. Much of the “gold vs bitcoin” narrative stems from tribalism on Twitter. Smart investors hold both assets.

What these two days have shown is that both assets can experience wild swings when positions become too crowded. The label "safe haven" doesn't protect you from a cascade of liquidations.

Conclusion

Gold just had its worst day in more than 40 years. Silver suffered its sharpest plunge since the Hunter Brothers incident.

In one trading day, precious metals lost approximately $3 trillion in market value.

Meanwhile, Bitcoin fell to $82,000 but did not collapse. （截至发文时，比特币价格已一度跌至 7.7 万美元附近。）

The data suggests we may be at a turning point. The money pouring into the gold market in 2025 now has reason to question the “safe haven” narrative. Some funds may move to Bitcoin following historical lag patterns, which typically last 4-7 months.

But nothing is guaranteed. If the macros worsen, Bitcoin could plummet along with everything else. Gold prices may rebound and resume their upward trend as the rotation effect may never materialize.

What we know for sure is:

• Central banks are still buying gold (863 tons in 2025)

• US debt spirals ($38 trillion in debt, $1 trillion in interest payments)

• The reserve currency status of the US dollar is gradually weakening (reserves account for 70% → 58%)

• Bitcoin’s ETF infrastructure has matured significantly

• Institutional investors remain interested even as capital flows fluctuate

• The Federal Reserve is likely to cut interest rates 2-3 times in 2026

The current situation is interesting. The catalyst has just emerged. Now we'll wait and see if this theory holds true.

Soon we'll find out what happens next.