Bitcoin could reach new highs due to a global central bank rush for gold

The key takeaways:

• The 30-year Treasury yield dropped 30 basis points, resulting in a $19 billion increase, which is the largest since March 2023.

• As gold reserves reached 18% and foreign central banks cut US Treasury to 23%, the holdings of US Treasury fell to a record low in 22 years.

• Bitcoin’s price jumped from $9,000 in 2020 to $60,000. Similar trends suggest a similar result in 2025.

Bitcoin’s (BTC) value could benefit greatly from the global financial shifts. Recent data indicates that US Treasury funds saw $19 billion in net inflows last week, exceeding the 2020 pandemic peak of $14 billion, with the 4-week moving average rising to $7 billion—the highest since March 2023.

This decline in the 30-year US Treasury’s yield from April to its current level indicates that investors are more willing to accept lower rates of return in exchange for safety. This increase in the demand for Treasurys, which are viewed as safe assets by investors, boosts both market stability and liquidity while also lowering US borrowing rates.

Foreign central banks, however, have reacted by reducing their Treasury holdings, which now stand at 23%, the lowest level in 22 years. The fact that foreign central bank holdings are down suggests the opposite. While private investors may have been driving the inflows into the US government debt, they’re now pulling back. 

At the same, Gold shares of global reserves has surged to 18%China has doubled its gold reserves since 2023, to 7,1%, which is a new 26-year record.

The global trend of dedollarization is a positive one for Bitcoin. Bitcoin’s value soared during the pandemic of 2020, as US Treasury flows spiked due to COVID-19 uncertainties. By early 2021 it had risen from $9,000 up to $60,000, and gold reserves grew by 14% in just 18 months. 

Bitcoin is likely to experience a bullish movement in the near future, given that there are signs of a stable bond market, and gold-rush by central banks. Bitcoin grew 47% during a single month in 2023 when US Treasury rates rose due to recession concerns. Nasdaq declined 8.7%. Bitcoin becomes more attractive as a store of value when yields are easing, and central banks show a lack in faith for the US dollar.

Bitcoin’s bullish story could be thrown into doubt if the global economy enters a recession by 2025. Investors tend to prefer traditional assets such as cash and US Treasurys in times of economic recession, according to a report last week. They do not prioritize speculative investments like Bitcoin.

Related: Bitcoin upside could stop at $100K despite $3B in ETF inflows

Google Searches for “Bitcoin” Bitwise CEO: Long-term Lows in Bitwise Prices

Capital Flows of Anonymous Global Markets Researchers noted The bullish Bitcoin price is driven by macroeconomic factors such as liquidity and position. Analyst highlighted BTC’s strength of impulse in a probability chart with a direction, suggesting it was poised to move upward.

The Bitwise CEO Hunter Horsley noted that Google searches are a good indicator of the quality of search results. “Bitcoin” Near-long-term lows suggest that the rally has been driven by institutional investors, corporates and governments, rather than individual retail investors. 

Bitcoin’s price was strongly related to the volume of searches in previous cycles. (r=91%, per SEMrush data)The market is changing, with institutional demand driving the growth.

Related: Bitcoin ‘power law’ model forecasts $200K BTC price in 2025

The article is not intended to provide investment advice. Risk is inherent in every investment decision and trade. The reader should always do research prior to making a final decision.