Recently, when opening market apps, the sharp plunge in gold and silver prices indeed tends to make people feel uneasy. During this rapid decline of gold and silver, some investors hurriedly cut losses, but others have sensed a change in the wind and quietly shifted their funds into digital assets, a new battleground. As a long-term observer of the crypto ecosystem, my assessment of this phenomenon is: this is not a risk signal; rather, it is a prelude to the 2026 crypto bull market.

Let's start with the fundamentals. Why might the decline in precious metals actually be beneficial for digital assets? The core logic here is one word—liquidity migration.

Traditionally, gold and silver are called "hedging tools" for a simple reason: investors believe they can resist inflation and protect assets. But the situation is changing now. Adjustments in global central bank policies and reallocation of market risk appetite, among other factors, are collectively weakening the "moat" of traditional precious metals. I have reviewed market trends over the past decade and found an interesting phenomenon: whenever precious metals experience a temporary drop of over 15%, within the next 3 to 6 months, the digital asset market tends to see a significant influx of funds. This pattern has been validated in 2019 and 2022.

Some may ask: "Isn't Bitcoin also marketed as a hedging asset? So why does it rise when gold falls?" That’s a good question, but it also reflects a misconception many people haven't yet changed—Bitcoin can no longer be fully described as "digital gold."

What are the issues with gold? Mainly these points: long realization cycle, high custody costs, and low transfer efficiency. Bitcoin has addressed all these pain points. More importantly, the infrastructure of the crypto market has evolved significantly compared to five years ago. Compliance channels are continuously expanding, and the entry barriers for institutional funds are decreasing, making it easier for professional investors to participate.

When large capital seeks new stores of value, the appeal of digital assets like Bitcoin becomes more apparent. Liquidity doesn't disappear into thin air; it just flows between different assets. The portion that gold cannot absorb will naturally flow into substitutes with modern advantages.

Another detail worth noting is that this wave of gold and silver decline coincides with the stage of increasingly improved global regulatory frameworks for cryptocurrencies. Rising compliance, decreasing risk premiums—factors that once made institutional investors hesitant are now being eliminated. From a data perspective, the proportion of Bitcoin held by institutions continues to increase, which is no coincidence.

In the short term, the market may still experience volatility. But from a medium-term perspective, the transfer from traditional safe-haven assets to new digital assets is highly probable. This round of sharp decline in precious metals is less a crisis and more a window for the crypto market to absorb liquidity. For investors with a basic understanding of the crypto ecosystem, this is actually a rare entry opportunity.