China may shift to Bitcoin and gold amid global uncertainty and geopolitical tensions to diversify outside the U.S. Treasuries, BlackRock’s head of thematics and equity ETFs Jay Jacobs said.
Jacobs said that central banks across the globe have been diversifying outside the U.S. dollar for decades now. Gold and Bitcoin are among the latest entrants to the list of alternative assets that banks have been increasingly relying on for the last 3-4 years, he added.
The BlackRock executive made the remarks in an interview with CNBC on Apr. 25.
In the long run, crypto is decoupled from the U.S. tech stocks even if the crypto market has been very much tied to stock and bond markets due to the recent tariff tensions, the BlackRock executive said.
Related: Tariff Live Updates: Trump’s softening rhetoric on China has Bitcoin topping $94K
Jacobs argued that Bitcoin behaves differently from traditional assets. While the latter depend on higher growth, higher certainty, and lower geopolitical risks to thrive, it’s not the case with the former. These factors are opposite drivers for Bitcoin. It thrives when there is “more uncertainty,” he added.
Unlike stocks and bonds, assets like Bitcoin and gold should continue to surge in value in the long term if there is a trajectory of greater uncertainty around the world, Jacobs said.
BlackRock itself has discovered that geopolitical fragmentation is the “mega force” that will drive the markets over the next decades, and Bitcoin is a result of it, the executive said.
As per the U.S. Treasury Department, China held $784.3 billion in U.S. Treasuries toward the end of February.
China’s gold reserves were valued at $229.6 billion at the end of March, the Economic Times reported on Apr. 21.
As per Bitbo’s Bitcoin Treasuries, China held 194,000 BTC worth $18 billion at the time of writing.
As per Kraken’s price feed, Bitcoin was trading at $95,087.43 at press time.
