The global financial market is experiencing significant fluctuations, and Bitcoin (BTC) could be the biggest beneficiary. The latest data shows that US Treasury bond funds recorded a net cash inflow of up to $19 billion in the previous week, surpassing the peak of $14 billion during the 2020 pandemic period. The 4-week moving average has also increased to $7 billion — the highest since March 2023.
The US Treasury bond yield for 30-year terms has dropped 30 basis points from its April peak, reflecting the bond price increase as investors accept lower returns for safety. The surge in safe-haven demand has boosted market liquidation, helping to reduce US borrowing costs.
However, foreign central banks are withdrawing, reducing their Treasury bond holdings to 23% of total US public debt — the lowest in 22 years. This indicates that cash flows into bonds primarily come from the private sector, amid the escalating US-China trade war.
Meanwhile, the gold proportion in global reserves has jumped to 18% — the highest in 26 years, increasing by 8% compared to 2015. China alone has doubled its gold reserves, reaching 7.1% just from 2023 to date.
The trend of reducing dependence on the USD is repeating a pattern that previously supported Bitcoin's explosion. During the COVID-19 pandemic, when cash flows into Treasury bonds surged, Bitcoin's price rose from $9,000 to nearly $60,000 in early 2021, while the gold proportion in global reserves increased by 14.5% in just 18 months.
Currently, with a stable bond market and central banks eagerly accumulating gold, Bitcoin may be preparing for a new price surge. In 2023, when Treasury yields increased due to recession concerns, Bitcoin rose 47% in just one month, while the Nasdaq index dropped 8.7%. Now, as yields cool down and confidence in the USD weakens, Bitcoin's position as a global store of value is being reinforced.
However, Bitcoin's price appreciation prospects could be shaken if the global economy falls into recession in 2025. During crises, investors tend to prioritize liquidation and traditional safe assets like cash or US bonds, rather than highly speculative assets like Bitcoin.
An anonymous global market researcher named Capital Flows points out that macro cash flows and current investment positions are supporting Bitcoin's price increase. Analyzing the probability volatility chart, Capital Flows believes BTC is in a phase with strong upward momentum.
Simultaneously, Bitwise CEO Hunter Horsley notes that "Bitcoin" search volumes on Google are at long-term lows, indicating that the current surge primarily comes from institutions, businesses, and governments, rather than individual investors.
This contrasts with previous cycles, where Bitcoin search volumes had a very high correlation with price (r=91% according to SEMrush data), suggesting the market is entering a new phase, with the primary driver being widespread institutional acceptance.
You can view BTC prices here.
Disclaimer: This article is for informational purposes only and is not investment advice. Investors should thoroughly research before making decisions. We are not responsible for your investment choices.
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