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Gold Overtakes US Debt — What It Means for Bitcoin and Digital Assets
Gold Overtakes US Debt – For the first time in nearly three decades, foreign central banks now hold more gold than US Treasuries, signaling a profound shift in the foundations of global finance. This quiet yet powerful rotation from paper assets to hard metal highlights a growing concern over safety, liquidity, and trust in the global monetary system.
Central Banks Go All-In on Gold
According to Barchart data, the crossover comes as central banks continue their record-breaking gold buying streak into 2025. The World Gold Council reported that institutions added a net 19 tonnes in August, following 10 tonnes in July, putting the year on pace for around 900 tonnes in total — more than double the long-term average for the fourth straight year.
The Kobeissi Letter noted that central banks have now bought gold for 16 consecutive years, the longest streak on record, after decades of being net sellers before 2010. “Central banks cannot stop buying gold,” the report emphasized, reflecting a deeper revaluation of what constitutes “safe” assets.
From Inflation Hedge to Pristine Collateral
Macro researcher Sunil Reddy linked gold’s latest surge to the collapse of the Federal Reserve’s reverse-repo balances, where banks once parked excess liquidity. “When those balances nearly vanished, gold went vertical… Capital seeks what can’t default — hard money,” he explained.
Digital Gold Awaits Its Turn
Even as gold reigns, crypto voices are taking note. Investor Lark Davis pointed out that while gold dropped 5% in its steepest fall since 2013, Bitcoin rose 3%. His math suggests that if Bitcoin absorbs even a fraction of gold’s market cap, “1% equals $134,000, 3% equals $188,000.”
