US Treasury recognises Bitcoin as digital gold worth $1.3T

The United States Treasury Department has officially recognised Bitcoin (CRYPTO:BTC) as “digital gold,” emphasising its role as a store of value in the evolving financial landscape.

This acknowledgment comes in the Treasury's latest report, which highlights the rapid growth of digital assets, including Bitcoin and stablecoins.

The report notes that while digital currencies are expanding quickly, they still represent a small fraction of the overall market compared to traditional financial instruments like U.S. government bonds.

“The primary use case for Bitcoin seems to be a store of value aka ‘digital gold’ in a decentralised finance (DeFi) world,” according to the Treasury.

Bitcoin's market value has seen significant increases, rising from $6.4 billion in 2015 to approximately $1.3 trillion in 2024. 

This growth reflects increasing interest in decentralised finance and digital tokens.

Federal Reserve Chairman Jerome Powell has also compared Bitcoin to gold, reinforcing its status as a potential safe-haven asset.

However, the Treasury report indicates that most individuals engage with cryptocurrencies primarily as speculative investments, seeking future value appreciation rather than using them as replacements for traditional assets.

“Structural demand for Treasuries may increase as the digital asset market cap grows, both as a hedge against downside price volatility and as an ‘on-chain’ safe-haven asset,” the Treasury stated.

In addition, the report discusses the significant role of stablecoins in the crypto ecosystem. 

Over 80% of all cryptocurrency transactions involve stablecoins, which serve as intermediaries in digital markets.

Stablecoin providers such as Tether rely heavily on U.S. Treasury bills and other treasury-backed assets as collateral, holding approximately $120 billion in U.S. Treasuries.

As the stablecoin market expands, demand for Treasury securities is expected to rise due to their use as a hedge against price volatility.

The Treasury's recognition of Bitcoin and stablecoins signals an increasing intersection between traditional finance and blockchain innovations. 

At the time of reporting, the Bitcoin price was $99,274.00.