Global central bank gold rush could spark Bitcoin price run to new all-time highs

Key takeaways:

• US Treasury funds saw $19 billion inflows, the highest since March 2023, as the 30-year yield fell 30 basis points.

• Foreign central banks cut US Treasury holdings to 23%, a 22-year low, as gold reserves hit 18%.

• Bitcoin soared in 2020 from $9,000 to $60,000 amid similar trends, hinting at a similar outcome in 2025.

The global financial tides are shifting significantly, and Bitcoin (BTC) price could greatly benefit from it. 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.

The 30-year US Treasury yield fell by 30 basis points from its April peak, indicating a rise in bond prices as investors are willing to accept lower returns in exchange for the safety of these bonds. This surge in demand for Treasurys as a safe-haven asset boosts market liquidity and stability while lowering US borrowing costs.

However, foreign central banks have pivoted, cutting Treasury holdings to 23% of US government debt, a 22-year low. This suggests that while private investors were possibly driving inflows, foreign central banks are stepping back, possibly due to the ongoing tariff dispute with the US. 

At the same time, gold’s share of global reserves has surged to 18%, a 26-year high, up 8% since 2015, with China doubling its gold reserves to 7.1% since 2023.

This global de-dollarization trend mirrors a pattern that favors Bitcoin. During the 2020 pandemic, when US Treasury inflows spiked amid COVID-19 uncertainty, Bitcoin soared from $9,000 to nearly $60,000 by early 2021, with gold’s share of global reserves rising by 14.5% in 18 months. 

The current environment, marked by a stabilizing bond market and a central bank’s gold rush, implies a similar trigger for Bitcoin’s next bullish move. In 2023, when US Treasury yields rose amid recession fears, Bitcoin gained 47% in a month while the Nasdaq dropped 8.7%. With yields easing and central banks signaling a lack of faith in the US dollar, Bitcoin’s appeal as a global store of value improves.

However, Bitcoin’s bullish narrative could falter if global markets enter a recession in 2025. This is due to investors’ decision to prioritize liquidity and traditional safe-haven assets like cash or US Treasurys during economic downturns, as noted last week, over speculative assets like Bitcoin.

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

Anonymous global markets researcher Capital Flows noted that macroeconomic liquidity and positioning factors drive Bitcoin’s bullish price trajectory. The analyst highlighted BTC’s impulse strength in a directional probability skew chart, suggesting that it is poised for an upward movement.

This aligned with Bitwise CEO Hunter Horsley’s observation that Google searches for "Bitcoin" are near long-term lows, suggesting the rally is fueled 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 (r=91%, per SEMrush data), indicating a shift in market dynamics where institutional adoption is fueling demand.

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

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.