Central Banks’ Gold Rush May Ignite Bitcoin Rally to Record Highs
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Global shifts away from U.S. debt and into gold could set the stage for Bitcoin’s next major rally, mirroring patterns seen in 2020.
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A weakening U.S. Dollar Index, institutional accumulation, and reduced reliance on Treasurys create a favorable environment for Bitcoin to hit new highs.
Following insights shared by previous Crypto News Flash (CNF) reports, which showed that Bitcoin’s exchange ratio signaled a bullish 2025 rally, the global financial landscape is undergoing a major shake-up — and Bitcoin might be the next big winner.
According to recent data, U.S. Treasury funds attracted a massive $19 billion in net inflows last week, surpassing even the 2020 pandemic peak. Meanwhile, the 30-year U.S. Treasury yield dropped sharply, signaling strong demand for safer assets as investors hedge against uncertainty.
Interestingly, while private investors are loading up on Treasurys, foreign central banks are quietly reducing their U.S. debt exposure to a 22-year low. Instead of this, they are piling into gold at an accelerating pace. Gold now makes up 18% of global reserves, the highest in 26 years, with China notably doubling its reserves over the past year.
Bitcoin’s Past Patterns Point Toward New Highs
This shift away from the U.S. dollar toward gold mirrors behavior we saw during the 2020 pandemic — when Bitcoin exploded from $9,000 to nearly $60,000. History could be repeating itself. Central banks’ distrust in the dollar and growing gold reserves suggest an environment ripe for Bitcoin to shine as an alternative store of value.
Interestingly, CNF’s 2022 reports highlighted two prominent events on the utilization of Bitcoin by some central banks, including Norway and Switzerland embracing Bitcoin (BTC) as a major asset, while Bhutan, Venezuela, and Iran were still acquiring Bitcoin.
Data from Bitwise and market analysts suggest that Bitcoin’s current rally isn’t driven by retail hype (Google searches for “Bitcoin” remain low) but by institutions, corporations, and even governments. That’s a big shift from past cycles — and it could make this rally more sustainable.
Macroeconomic Factors Favor a Bitcoin Surge Today
Adding to this kind of bullish setup, the U.S. Dollar Index (DXY) recently hit a three-year low, a move that historically precedes strong Bitcoin rallies. As shared in a recent tweet by The Kobeissi Letter, it was revealed that:
US Treasury funds posted a record ~$19 billion in net inflows last week. This surpassed the previous high of ~$14 billion seen during the 2020 pandemic. As a result, the 4-week moving average jumped to ~$7 billion, the highest since March 2023. Meanwhile, the 30-year Treasury yield is down nearly 30 basis points from its April high.
If a global recession strikes in 2025, investors might flee to cash and Treasurys instead of Bitcoin, potentially stalling momentum.
As of today, Bitcoin (BTC) is trading around $94,795, according to CoinMarketCap, reflecting a 7.49% increase in the past week.
