"Central Bank Gold Rush Boosts Bitcoin to New Highs"

"Central Bank Gold Rush Boosts Bitcoin to New Highs"
How Global Central Bank Gold Rush Could Ignite Bitcoin to New All-Time Highs
The recent shifts in global financial trends could have a significant impact on the price of Bitcoin (BTC). Data shows that US Treasury funds experienced a whopping $19 billion in net inflows last week, surpassing the peak during the 2020 pandemic of $14 billion. The 4-week moving average also surged to $7 billion, the highest since March 2023.
The 30-year US Treasury yield dropped by 30 basis points from its April peak, indicating an increase in bond prices as investors seek the safety of these bonds even at lower returns. This surge in demand for Treasurys as a safe-haven asset boosts market liquidity and stability while reducing US borrowing costs.
On the other hand, foreign central banks have adjusted their Treasury holdings to 23% of US government debt, marking a 22-year low. This shift suggests that while private investors might be driving the inflows, foreign central banks are pulling back, possibly due to ongoing tariff disputes with the US.
Simultaneously, gold's share of global reserves has surged to 18%, the highest in 26 years, with an 8% increase since 2015. China alone has doubled its gold reserves to 7.1% since 2023.
This de-dollarization trend globally mirrors a pattern that favors Bitcoin. In the midst of the 2020 pandemic, when US Treasury inflows spiked due to COVID-19 uncertainty, Bitcoin surged from $9,000 to nearly $60,000 by early 2021, while gold's share of global reserves increased by 14.5% in 18 months.
The current landscape, characterized by a stabilizing bond market and a sudden gold rush by central banks, sets the stage for Bitcoin's next bullish move. In 2023, a period marked by rising US Treasury yields amid recession fears, Bitcoin saw a 47% surge in a month while the Nasdaq dropped by 8.7%. With yields easing and central banks signaling a lack of confidence in the US dollar, Bitcoin's appeal as a global store of value strengthens.
However, Bitcoin's bullish narrative could face challenges if global markets enter a recession in 2025. Investors tend to prioritize liquidity and traditional safe-haven assets like cash or US Treasurys during economic downturns, as observed last week, over speculative assets like Bitcoin.
Google Searches for "Bitcoin" at Historic Lows, Notes Bitwise CEO
According to the anonymous global markets researcher Capital Flows, Bitcoin's bullish price trajectory is influenced by macroeconomic liquidity and positioning factors. The researcher highlighted BTC's strength in a directional probability skew chart, suggesting it is primed for an upward movement.
This aligns with Bitwise CEO Hunter Horsley's observation that Google searches for "Bitcoin" are at long-term lows, indicating that the rally is being driven by institutions, advisers, corporations, and nations rather than retail investors.
The lack of retail-driven search interest contrasts with historical trends where Bitcoin search volume strongly correlated with its price in the previous cycle, indicating a shift in market dynamics where institutional adoption is fueling demand.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Comments
Post a Comment