Quick overview

---

The People’s Bank of China (PBOC) increased its gold reserves for the eighth consecutive month, bringing total holdings to 73.7 million troy ounces. and surreptitiously, one of the world’s largest gold reserves.

This signals a deeper strategic shift that impacts far beyond bullion vaults, especially in the cryptocurrency space, and indicates it’s about more than just a metal obsession. The ongoing gold purchases by the PBOC go well beyond the traditional maxim, “buy gold when things get shaky.”

China is subtly reducing its reliance on the US dollar. It’s a gamble against potential currency fluctuations and geopolitical instability. Digital assets tell the same story: hedge your bets, protect your wealth outside traditional finance, and stay strong when fiat fails.

The value of the Chinese yuan has appreciated. Divergent global monetary policies, trade disputes, and economic slowdowns have all contributed to the decline of the currency. A reserve rich in gold provides Beijing with greater flexibility.

This approach helps stabilize the yuan without attracting attention or causing alarm. It is significant because cryptocurrencies often thrive in environments where fiat currencies are weakened. Domestic demand for Bitcoin as a local hedge may decrease if gold stabilizes the yuan.

However, for investors worldwide, China’s shift offers a crucial lesson. The idea that non-sovereign assets should be included in a savvy portfolio is gradually gaining acceptance in traditional finance. The hedging dance isn’t exclusive to China; interest in alternative assets is growing everywhere.

According to the World Gold Council, state-level gold purchases remained strong in May despite a decline in retail interest. Central banks, not Main Street, are the primary buyers of all that gold.