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Gold buying by central banks may drive Bitcoin higher

Gold buying by central banks may drive Bitcoin higher

GrafaGrafa2025/04/29 02:21
By:Mahathir Bayena

A surge in global central bank gold purchases and shifting trends in US Treasurys could set the stage for Bitcoin (CRYPTO:BTC) to reach new all-time highs.

Recent data shows US Treasury funds saw $19 billion in inflows last week, the highest since March 2023, as the 30-year Treasury yield dropped by 30 basis points.

This suggests investors are seeking safety in bonds, increasing market liquidity and lowering US borrowing costs.

However, foreign central banks have reduced their share of US Treasury holdings to 23%, the lowest in 22 years, while gold reserves have climbed to 18% of global reserves, a 26-year high.

China, for example, has doubled its gold reserves to 7.1% since 2023.

This shift points to a global de-dollarisation trend.

A similar pattern was seen in 2020, when Treasury inflows and rising gold reserves coincided with Bitcoin’s surge from $9,000 to nearly $60,000.

In 2023, as Treasury yields rose and recession fears grew, Bitcoin gained 47% in a month, even as the Nasdaq fell.

With yields now easing and central banks signaling reduced confidence in the US dollar, Bitcoin’s appeal as a store of value is increasing.

“Trigger Bitcoin’s next bullish move,” analysts note, especially as institutional investors and sovereign entities seek alternatives to traditional assets, if these trends continue.

Yet, if a global recession hits in 2025, investors may prioritise liquidity and traditional safe havens like cash or Treasurys over speculative assets such as Bitcoin.

Bitwise CEO Hunter Horsley points out that Google searches for “Bitcoin” are near long-term lows, indicating that the current rally is driven by institutions and governments rather than retail investors. 

At the time of reporting, the Bitcoin price was $94,628.27.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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