The financial world has just passed a landmark moment: Gold has officially surpassed U.S. government bonds to become the top reserve asset of central banks for the first time since 1996. This is not just a mere statistic, but also a testament to a structural shift in global asset management thinking.
Historical milestone since 1996: $5.0 trillion compared to $3.9 trillion
According to the latest data, the total value of gold held by central banks currently stands at approximately $5.0 trillion, while US bonds only maintain a level of $3.9 trillion. That's how it is, after nearly three decades, "zero-interest assets" like gold once again affirm their position against the strongest debt instrument in the world.
The reduction of the proportion of US bonds in total global reserves to 23% reflects a clear trend: countries are gradually reducing their dependence on the public debt of a single nation.
Why are central banks "turning back" on US bonds?
Since the end of 2019, a massive amount of over 4,500 tons of gold has been accumulated by central banks. There are three core reasons driving this action:
Increased geopolitical risks: Global tensions are causing countries to seek safety from assets that are not dependent on the financial system of any particular nation.
Concerns about US public debt: The pressure from the enormous debt load has caused government bonds to no longer be regarded as an "absolutely risk-free" asset as before.
The need for diversification: To protect the domestic economy, allocating to various types of reserve assets is an urgent requirement. $XAU $PAXG
Bitcoin and the story of "digital gold" in the investment portfolio
Although gold has surpassed US bonds in the category of non-USD assets, it is important to note that the USD still accounts for about 58% of total global reserves. This shows that the world is not ready to give up the dollar, but is seeking stronger backup options.
For the Crypto community, this event is a significant supportive signal for the argument about "hard assets." As central banks prioritize gold due to its finite nature and ability to preserve value, Bitcoin – seen as digital gold – will increasingly be accepted in institutional investment strategies.
That's how it is, instead of just viewing Crypto as a speculative tool, large flows of capital are beginning to see digital assets as part of the diversification revolution. Retail investors should take advantage of accumulation market phases on major exchanges to build long-term positions calmly and disciplined. #Colecolen