BlackRock Warns: China Could Ditch U.S. Debt for Bitcoin and Gold

Move over, Treasury bonds—China’s eyeing a crypto-gold hedge against dollar dominance. BlackRock analysts suggest Beijing may accelerate its diversification play as geopolitical tensions flare.

Why it matters: When the world’s second-largest economy sneezes at U.S. debt markets, everyone catches a cold. This isn’t your grandpa’s reserve strategy—it’s a blockchain-and-bullion bullet train.

The kicker: Wall Street’s still betting on 30-year bonds while Xi Jinping’s team stacks SATs. Nothing says ’modern monetary theory’ like a central bank moonlighting as a Bitcoin whale.

He emphasized the continuous development of a trend where countries shift from holding reserves in US dollars to gold and bitcoin.

Jacobs from BlackRock noted that Western Europe and North America have frozen $300 billion of Russian central bank assets. He argues that such situations have prompted China and other nations to reconsider their strategies.

Jacobs highlighted that after multipolarity, the key element worldwide that will focus on in the coming decades stems from BlackRock’s analysis: geopolitical fragmentation.

“We’ve identified geopolitical fragmentation as a key force that will be a global driver over the next few decades,” he remarked.

He added that Bitcoin is increasingly seen as a safe investment alongside gold, while this scenario also boosts the demand for more volatile stock market assets.

“And it’s all because people look for assets with independent market behavior. We’ve seen significant inflows into gold ETFs, and we’ve seen significant inflows into bitcoin. Also, Jacobs explained,” he noted. Jacobs observed that recent global fragmentation has intensified the need for alternative saving methods.

“This whole diversification away from traditional assets towards gold and cryptocurrencies [… started three to four years ago,” he said.