Bitcoin has broken above a six-day downtrend, starting the week with a 1.7% gain and sparking hopes of a move past $65,000. However, investors are rotating capital from Bitcoin into gold, with the BTC/XAU ratio declining 7.22% in August. A $17 billion Federal Reserve liquidity injection is set to flow into risk assets next week, but stablecoin market cap data reveals over $5 billion in outflows in Q3 alone. This suggests that despite the bullish liquidity backdrop, capital is leaving the crypto ecosystem, with tokenized gold products like XAUT and PAXG capturing demand over Bitcoin.
Bitcoin began the week with a 1.7% increase after breaking back above its six-day downtrend, leading analysts to believe a move above $65,000 could be imminent. However, the BTC/XAU ratio declined 7.22% this month, wiping out most of July’s gains and indicating a rotation from Bitcoin into gold.
According to Token Terminal, tokenized commodity market cap growth over the last 30 days has favored gold-backed stablecoins, with XAUT adding $237.1 million and PAXG adding $125.3 million. This demand for tokenized gold suggests that investors are rotating into the safe-haven asset in both traditional and crypto markets.
The Federal Reserve’s planned injection of $17 billion in liquidity could provide a catalyst, but stablecoin market cap data from DeFiLlama shows deposits have shrunk by over $5 billion in Q3, extending an outflow trend. A total of more than $10 billion was withdrawn from stablecoins over the last two quarters.
As stated by analysts, “the safe-haven asset has been witnessing substantial on-chain and off-chain flows.” This ongoing preference for gold, combined with stablecoin outflows, suggests that recent liquidity injections may be insufficient for Bitcoin to overcome the $70,000 barrier.
