Central banks accumulate gold worldwide to protect themselves from inflation, but Bitcoin far exceeds the precious metal

17. Juli 2023

Krypto News Österreich

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Central banks are currently buying gold to protect themselves from inflation. A study by the Investco Global Soverägn Asset Management shows that a total of 85 state funds and 57 central banks manage $ 21 trillion worldwide and aggressively accumulate gold. The report explains that in view of the persistently high inflation and high real interest rates, adjustments are made in the investment portfolios. The central banks therefore buy gold, store it in safe and prepare for high inflation.

According to investco, central banks in 2022 acquired a record of 1,136 tons of gold, which is the twelfth year in a row in which the global gold stocks of the central banks rose. China and Turkey in particular were very aggressive buyers and acquired 20 % of this sum. Many other central banks, especially in the Middle East and in the emerging countries, have also made remarkable gold purchases. The background to these decisions is the relevant risk of inflation, which the central banks want to encounter with an increase in the gold allocation. According to the report, around two thirds of the central banks worldwide try to protect their portfolios from global inflation tendencies.

The central banks agree that gold is a safe harbor and therefore unanimously expand their gold stocks. A survey mentioned in the report shows that the significant percentage of central banks is concerned about the consequences of the sanctions imposed by the USA, which further increases the attractiveness of the gold. In addition, physical gold bars are viewed more attractive than stock markets such as futures.

In the meantime, Bitcoin has proven itself as a wealth memory and protection against inflation. The former Chief Technology Officer from Coinbase, Balaji Srinivasan, points out that hard assets such as gold and Bitcoin are increasingly taking on the role of the reserve currency. Currencies such as the Chinese Yuan and the Indian rupie, on the other hand, gain in importance for trade. Although central banks are still suspicious of digital assets, there is no doubt that Bitcoin has recently performed better than gold. The Bitcoin course has increased by more than 80 % since the beginning of the year, while the gold price has only increased by 4.6 % in the same period.

In addition, Tether, the issuer of the USDT stable coin, also advertises for his gold -covered asset Xaut as protection against inflation. Investco's study therefore confirms the continuing trend of central banks to regard gold as a protective measure against inflation, but the Bitcoin has a significantly better performance in terms of return than the precious metal.