Despite the late-Q1 bounce, the broader quarter still played out as a bearish phase for the market.
From the technical standpoint, Bitcoin [$BTC] may have closed March up 1.5%, but it ultimately finished Q1 down more than 22%.
Similarly, the $BTC-to-gold ratio briefly rebounded by over 17% during the month, yet it still ended Q1 down more than 28%, extending the 31% drawdown seen in Q4.
In other words, Bitcoin’s relative strength against gold continued to weaken.
Meanwhile, tokenized gold (XAUT) attracted notable capital flows. As the chart below shows, spot trading volume in tokenized gold hit $90.7 billion in Q1 2026, already surpassing the $84.6 billion recorded across all of 2025.
Essentially, demand for tokenized gold kept building even as Bitcoin underperformed.
When you layer this against the Q1 drawdown in the $BTC/gold ratio, the setup becomes more meaningful.
While markets briefly read the 17% rebound in the ratio as a sign that Bitcoin could be reasserting its “digital gold” narrative, $BTC’s 1.5% March gain was nowhere near enough to match the scale of activity in XAUT.
Instead, the divergence highlights a clear flow preference: Even as traditional gold saw periods of weakness, demand continued shifting toward tokenized exposure, especially in an environment shaped by uncertainty.
Naturally, this raises a key question: With macro FUD back in focus, is Bitcoin’s Q2 rally now at risk?
Macro FUD returns as tokenized gold gains raise Bitcoin Q2 risk
So far, Q2 has been broadly bullish across the board, with markets shifting back into a risk-on mood.
From a technical standpoint, Bitcoin’s 6% gain in May has lined up with a more than 7% pullback in oil prices after they peaked near $120 per barrel earlier in the month.
Typically, easing oil prices are seen as supportive for risk assets, as they help cool inflation pressures and improve overall liquidity conditions.
However, that trend looks short-lived. As highlighted in the latest remarks from U.S. President Donald Trump on Iran’s response to the U.S. 14-point peace proposal, geopolitical uncertainty quickly re-entered the picture.
The result: U.S. oil prices jumped nearly 5% after President Trump said he “doesn’t like” Iran’s response. Meanwhile, Bitcoin reacted with a 1.5% pullback.
Naturally, that brings flow dynamics back into focus around tokenized gold.
With the $BTC/XAU ratio already up 5% on the month, flows are still favoring Bitcoin over traditional gold, extending April’s 12.6% move in the ratio. That said, with macro FUD creeping back in, the setup leaves the door open for capital rotating back into tokenized gold if risk-off sentiment builds.
If that rotation picks up, the risk of Bitcoin echoing a Q1-style correction in Q2 starts to rise, as investors rotate into safety via XAUT rather than staying exposed to $BTC beta or traditional gold, making this a key flow watch for the rest of the Q2 cycle.
Final Summary
- In Q1, Bitcoin declined while tokenized gold saw strong inflows, highlighting a clear shift in demand.
- In Q2, if macro FUD returns, capital could rotate back into tokenized gold and put pressure on Bitcoin’s momentum.
