Whales Securing Digital Gold

Market activity actually shows that whales are taking long-term positions rather than short-term trades. For instance, during the last week of January, large wallets withdrew multi-million-dollar amounts of XAUT and PAXG from Bybit and MEXC. On January 27, wallet 0xbe4C pulled nearly $10 million in XAUT; the same day, 0x0F67 withdrew about $2.8 million in XAUT.

Interestingly, wallet 0x1b7D simultaneously withdrew around $1 million worth of both XAUT and PAXG from MEXC. Of course, these aren’t random moves; they appear part of a larger accumulation strategy. On January 28, 0x6Afa spent almost $6 million to acquire PAXG over two days, while newly created wallet 0x0E4F pulled $4 million in XAUT from Bybit.

Negative Exchange Flows Signal Long-Term Holding

Data from Arkham Intelligence shows net negative exchange flows for Tether Gold over the past seven days. This actually indicates consistent withdrawals from centralized exchanges, suggesting long-term accumulation rather than short-term speculation. In other words, investors are positioning for continued upside.

XAUT’s market capitalization also reflects strong momentum. According to CoinGecko, Tether Gold’s total market cap reached around $2.9 billion, hitting an all-time high. This growth closely mirrors rising gold prices and increased demand for tokenized exposure.

Tokenized Gold Bridges Crypto and Safe-Haven Demand

The market trend shows that digital gold is bridging traditional safe-haven demand and crypto-native capital. Amid geopolitical tensions and monetary policy uncertainty, whales increasingly favor tokenized gold as a liquid, blockchain-based safe-haven.

With falling exchange balances and rising market capitalization, XAUT is emerging as a key long-term store of value. Truthfully, the accumulation by crypto whales signals a growing convergence between traditional bullion demand and the new digital frontier.

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Analysts stated, “Gold has been our highest-conviction long all year, and we believe it still has more room to rise as we enter the Fed’s rate-cutting cycle.” This outlook aligns with gold’s strong performance in 2025 amid interest rate cut expectations.

Recent Gold Movements and Investor Behavior

Gold has surged in 2025 due to interest rate cut expectations, geopolitical risks, and central bank diversification away from the U.S. dollar. After reaching a record $4,381 per ounce, gold has retreated to $4,066.

JP Morgan strategists attribute the recent decline not to retail investors exiting gold ETFs, but to trend-following commodity trading advisors taking profits on gold futures.

They note that in 2023 and most of 2024, retail investors turned to bonds to hedge rising equity prices. However, in 2025, this trend has not continued, with gold becoming the preferred hedge alongside equities.

Gold Investment Outlook

JP Morgan strategists predict that stock prices will continue rising over the next three years, with equity allocations reaching 54.6%, the peak seen during the dot-com bubble. At the same time, bond and cash positions are projected to increase by $7 trillion annually.

Using ETFs as a proxy, analysts calculate that global nonbank investors could increase their gold allocation from 2.6% to 4.6%, implying that gold prices could nearly double by 2028 if these projections hold.

Gold as a Portfolio Diversifier

Gold is not only a store of value but also a strong portfolio diversifier against equity risk. JP Morgan emphasizes that long-term capital allocators, including sovereign wealth funds, central banks, and asset managers, are likely to increase gold exposure.

Key Points:

• Expected quarterly gold purchases: 566 tonnes

• Q4 2026 gold forecast: $5,055 per ounce

• Equity allocations may reach 54.6%

• Annual increase in bonds and cash: $7 trillion

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