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Protection against the storm

Written by Pablo González and Pedro Nonay, trying to find what we can do in our adaptation to changes in world order.

Entry 15

Gold vs. Bitcoin in geopolitics.

October 24, 2025

Recently, in a conversation with Pedro, I suggested an intuition that had been on my mind. It was that, in the context of major geopolitical changes, and as a tool for monetary protection, China seems to be betting more on gold, and the US is betting more on Bitcoin (and other cryptocurrencies).

The conversation led me to try to investigate whether my intuition was correct. I will explain the data I looked for below, but I will say in advance that the hypothesis seems to be true. 

This has consequences, which I will discuss at the end.  

To search for the information, which is not a quick task on the conventional internet, I turned to AI. I used Perplexity for some concepts and Grok for others. The reason I used different AIs is because of the access to paid data in the different sources that each AI has. It’s not that I knew a priori what access each one had, but I found out after asking them the appropriate questions.

I thought to ask about two different aspects:

• The hourly prices of gold and Bitcoin during working hours in China and the US.
• Purchases for their reserves in central banks.
  
  

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To make it easier for the reader, I will first present my conclusions after the conversation with the AI, as well as the consequences of this.

At the end of the entry, I include a copy of my conversation with the AIs on the subject (the final part, since the entire conversation is much longer). I do this because they provide interesting data, and so that the reader can see my search process in this case. 

Conclusions.

In view of what is stated in the conversation with the AIs below, the summary is that, so far in 2025:

• Gold prices, on average for 2025, are rising during Chinese working hours and falling during US working hours.
  
• The opposite is true for bitcoin prices.

• China has increased its gold reserves by 21 tons according to official records, although some analysts say the actual figure could be up to 10 times higher.
• The US has not sold or bought gold in any significant way for years, officially.

• The US has not yet purchased bitcoin for its reserves, but it has announced that it wishes to do so soon and has introduced legislation favorable to the use of bitcoin. In addition, authorized ETFs have invested heavily in bitcoin, as have corporations known as “treasuries,” such as Strategy. The US has also stated that it will allocate seized bitcoins, which are not insignificant in amount, to reserves.
  
• China maintains bans on the use of bitcoin.

In other words, it seems to be confirmed that China is relying more on gold, and the US on bitcoin. Although it is clear that both powers are closely monitoring both markets.

Given this, Pedro suggests an interesting analogy. It seems that one of the blocs (the US) is seeking short-term profitability. The other (China) is pursuing a long-term strategy. This is consistent with their electoral systems, which are four years in one case, which is short-term; and decades in the other, which encourages a long-term vision.


Consequences.

What is clear is that the way benchmark currencies and central bank reserves are managed is going to change.

China is attempting a process it has called “de-dollarization.” This is leading it to seek ways to get rid of its large USD reserves (before they lose value). It is also leading it to seek ways to make its international payments and collections with the new currency it manages to implement (before getting rid of its USDs).

The US is trying to defend the dollar’s position as the benchmark currency, but it knows that this will not be easy. The examples it has set with SWIFT blockades and tariffs have led to a loss of confidence in many countries. However, even if the dollar loses some of its “prestige,” it will be a gradual process, as its current position is very strong.

In addition, the US has the problem of its extremely high debt. It needs to find a way to solve that. It may sound a little strange, but one way would be to encourage the dollar to lose value and find another new currency (probably digital) to which it can divert its transactions. 

An example of this is what is happening with Tether (the company that issues USDT). 

USDT is a stablecoin. Each USDT is “supposed” to be backed by a dollar that the company has in its possession and invests (the verb “suppose” is an important nuance, but it is not relevant to delve into that now). 

The idea is that if a user wants to buy USDTs for whatever reason (e.g., to pay for international purchases in countries that have blocked access to dollars via SWIFT, or to send international remittances from immigrants, etc.), the user gives dollars to the Tether company and receives USDTs. The Tether company uses those dollars to buy US debt. This way, the US gets more “customers” to sell its debt to, which is very useful in the current situation. 

The fact is that, today, Tether has more than 500 million users, and Tether has more than $120 billion in reserves, of which approximately 85% are Treasuries. This is no small matter.

For the same reason, USDT is already widely used in China, via OTC, with transaction volumes exceeding $100 billion annually. It is used so that Chinese export companies can collect from their customers who have dollars, who buy USDT with their dollars and pay Chinese companies with it.

Another interesting example is what BlackRock is doing with its BUIDL fund. It is a tokenized fund that invests in US Treasury bonds and offers returns. You can see it here. They already have $1.5 billion in assets under management.

In different ways, China could consider creating a stablecoin by tokenizing the gold it has in its reserves. It could be very disruptive.

I found this article interesting on these issues. Although I disagree with the title, which suggests that the BRICS countries are panicking. I believe that both blocs are deepening their strategy with digital currencies.

From that article, I extract the paragraphs that I consider fundamental:

• “The issue is that most analysis assumes tomorrow’s debt management will work exactly like yesterday’s, ignoring the emergence of stablecoins, CBDCs, and programmable money”.
  
  “In my experience, the biggest monetary shifts happen when three factors converge: unsustainable debt levels, technological innovation, and geopolitical pressure”.
  
  “The global financial system could split into competing digital currency blocs — dollar-based systems versus BRICS alternatives”.
  
  

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My conversation with AIs

Regarding quotes.

I did this with Perplexity.

Regarding gold.

The question was: “Please look at the hourly gold prices and tell me if (on average) the price has gone up or down each day during business hours in the US. Tell me the same for business hours in China. Do this for the prices for every day in 2025.”

The answer was as follows.

• Analysis of the 2025 data shows a clear pattern: gold tends to rise during Chinese business hours and fall or stabilize during US business hours, on average throughout the year.
  
  Definition of periods
  
  
  • China business hours: 02:00–10:00 UTC (Shanghai and Hong Kong sessions).
    
    
  • US working hours: 1:30 p.m.–8:00 p.m. UTC (New York and Chicago COMEX sessions).
    
    
• Average daily performance in 2025

• Interpretation
  
  • China drives physical demand: during its active hours, gold rises due to constant buying by the People’s Bank of China and the private sector as part of their reserve accumulation strategy.​
    
    
  • US reacts to financial data: New York traders adjust positions in response to economic news, often selling into the upside generated by Asia, causing corrections.​
    
  • Cumulative trend for the year: despite these intraday variations, gold in 2025 maintains a cumulative increase of more than 60% per annum, suggesting that Asian sessions have contributed more to the global momentum.
    
    

Regarding bitcoin

The question was: “Please do the same research for bitcoin.”

The answer was:

• Analysis of intraday data for 2025 shows a dynamic opposite to that of gold: bitcoin tends to move sideways or negatively during Chinese trading hours and rise during US trading hours.​
  
  Definition of periods
  
  • Chinese business hours: 02:00–10:00 UTC (Asian markets active).
    
    
  • US business hours: 13:30–20:00 UTC (Wall Street and CME Bitcoin Futures).
    
    
• Average daily performance in 2025

• Interpretation
  
  • Performance pattern by region: Asian hours contribute negatively to bitcoin’s compound return: K33 Research calculated a cumulative –9.7% in 2025 during Asian hours, compared to positive returns during US and European hours.
    
    
  • Liquidity and volatility: In Asia, bitcoin tends to lose momentum due to profit-taking and lower institutional activity; in the US, high-liquidity sessions (NYSE opening, CME futures) drive rallies.​
    
    
  • Macro factors: The most significant advances in 2025 occurred following US news—such as statements from the Trump administration on trade with China and inflation data—which strengthened bitcoin as a “technology risk proxy.”​
    
    

Central bank reserves.

I conducted this research with Grok.

I asked him about the behavior of the US and Chinese central banks toward gold and bitcoin.

He replied as follows.

1. China prioritizes gold over Bitcoin

• Massive accumulation of gold: The People’s Bank of China (PBoC) has been aggressively buying gold. In September 2025, it added 1.2 tons, marking the 11th consecutive month of purchases, with a total of 5 tons in the third quarter. China’s official gold reserves reached 2,298.53 tons in the second quarter of 2025, a significant increase from previous years. This is part of a broader strategy: China purchased 21 tons in 2025 through September, following 44 in 2024 and 225 in 2023. Analysts estimate that actual purchases could be up to 10 times higher if unofficial reserves are included, possibly exceeding 20,000 tons in total. This is seen as a “monetary defense” against sanctions and to support the yuan in international trade, especially with the BRICS countries.

• Rejection of Bitcoin: China maintains a strict ban on trading, mining, and possession of cryptocurrencies such as Bitcoin, reaffirmed in 2025. In August 2025, authorities ordered brokers to stop promoting stablecoins. Instead of Bitcoin, China is promoting its digital yuan (e-CNY) for controlled transactions. There is no evidence of state purchases of Bitcoin; on the contrary, the government is selling confiscated crypto. Rumors of legalization or massive purchases (such as $40B in BTC) have been repeatedly denied.

• Geopolitical context: With US-China trade tensions, China reduces its holdings of US Treasury bonds and accumulates gold for “de-dollarization.” In 2025, it invited nations to store gold in the Shanghai Gold Exchange, challenging Western dominance. This aligns with the BRICS, which are discussing gold-backed currencies.

2. The US prioritizes Bitcoin over gold (relatively)

• Stability in gold, no aggressive changes: US gold reserves remain unchanged at 8,133.46 tons for years, the largest in the world, but with no significant purchases or sales in 2024-2025. There are no signs of a “gold rush” as in China; the focus is on maintaining the status quo while the dollar dominates.

• Growing adoption of Bitcoin and crypto: The US has made progress on pro-crypto regulations. In January 2024, the SEC approved spot Bitcoin ETFs. In July 2025, the GENIUS Act was signed, creating a federal framework for stablecoins with 100% backed reserves. In January 2025, Trump issued an executive order to strengthen leadership in digital financial technology, including stablecoins. He also proposed a national “Strategic Bitcoin Reserve,” using confiscated BTC as a long-term reserve asset. Companies such as Microsoft and MicroStrategy accumulated BTC, and corporate holdings reached $117 billion in 2025.

• Geopolitical context: Amid tensions, the US sees Bitcoin as a “scarce and valuable asset” for digital hegemony. While gold rises amid uncertainty (reaching $4,376/oz in October 2025), Bitcoin struggles with trade wars but gains as a “macro hedge.” This contrasts with the European Union, which rejects Bitcoin in central reserves due to money laundering risks.

3. General geopolitical reasons supporting the division

• Debasement trade and uncertainty: With growing US debt and US-China tensions, both assets rise, but gold benefits China as a “traditional safe haven,” while Bitcoin is seen as “digital gold” for the US.
  
• Emerging blocs: China and BRICS use gold for non-dollar trade, while the US pushes crypto for innovation and to attract capital.
  
• Risks and counterarguments: It’s not black and white—China could explore crypto in the future if the digital yuan fails, and the US still relies on gold. But current trends support your theory.
  
  

Mass balance.

In view of these responses, after thanking it (I like to treat AI politely, especially considering that in the future, when it is in charge, it will remember everything), I asked it the following question: “That increase in China’s gold reserves, if we measure it in USD value, how does it compare to the decrease in US debt during the same period?” And it replied as follows.

• This involves comparing the increase in China’s gold reserves (35 tons) with the decrease in US debt holdings ($29.4 billion). I will use the average gold prices on the relevant dates for a fair comparison: $2,691.68 per ounce in October 2024 and $3,341.70 per ounce in July 2025. I converted the tons to troy ounces (1 metric ton ≈ 32,150.75 ounces) and calculated the values.
  
  Key calculations:
  
  • Value of the increase in gold (35 tons): 
    • At the October 2024 price: approximately $3.03 billion USD.
    • At the July 2025 price: approximately $3.76 billion USD (reflects the appreciation of gold during that period).
      
      
  • Decrease in US debt holdings: $29.4 billion USD (nominal, without adjustments for inflation or yields).
    
    
• Comparison:
  
  
  • If we value the increase in gold at the initial price (October 2024), it represents only about 10.3% of the decrease in debt ($3.03 billion vs. $29.4 billion).
    
    
  • At the final price (July 2025), it rises to 12.8% ($3.76 billion vs. $29.4 billion). In other words, the decrease in debt is about 7.8 times greater than the value of the added gold.
    
    
  • However, if we consider the total increase in the value of gold reserves (including the price appreciation of the existing 2,265 tons), the net gain is about $51.10 billion USD. This exceeds the decrease in debt by 73.8% ($51.1B vs. $29.4B), suggesting that the strategy of accumulating gold may have more than offset the reduction in Treasury bonds, thanks to the rise in the price of gold (~24% over that period).
    
    

Data reliability.

Given these responses regarding central bank gold reserves, I recalled reading in the past that some people have doubts about the reliability of the official data from both banks. Therefore, I asked him about this reliability. He replied as follows.

• Yes, your interpretation is correct, based on the evidence and analysis available as of October 2025. In the event of discrepancies or errors in the official data, suspicions for China predominantly point to underreporting (declaring fewer reserves than they actually hold), while for the United States, concerns focus on possible overestimates (declaring more than there actually is). This reflects differences in the geopolitical, regulatory, and transparency contexts of each country. Below, I detail the arguments based on recent sources, representing a variety of perspectives (analysts, financial media, and officials) to avoid bias.
  
  For China: Tendency to underreport
  
  Doubts about the official data from the People’s Bank of China (PBoC) focus on the fact that actual reserves could be significantly higher than those declared (around 2,300 tons in 2025). This is due to discreet accumulation strategies to avoid impacts on global markets or reveal geopolitical intentions, such as de-dollarization.
  
  
  • Main evidence: Goldman Sachs analysts estimate that actual gold purchases in 2025 could be up to 10 times higher than reported, based on unofficial import and export data, such as shipments from the UK that continue even when the PBoC pauses reporting. Other experts suggest that total reserves could exceed 5,000 tons (more than double the official figure) or even reach 30,000 tons if undeclared holdings by state entities are included.
    
    
  • Strategic reasons: This allows China to accumulate gold as a hedge against uncertainty without causing sharp price rises, and is in line with undeclared purchases by global central banks, which have doubled their pace in recent years. For example, analysis reveals that the PBoC continued massive purchases through channels such as London in 2024-2025, despite official reports of pauses.
    
    
  • Balanced outlook: Sources such as the World Gold Council acknowledge official accumulation (eight consecutive months of gains in the first half of 2025), but admit that indirect data (such as wholesale demand) suggest underreporting to maintain stability. 
    
    
• For the United States: Tendency to overreport
  
  Official US reserves (8,133.5 tons) are considered stable, but concerns focus on the possibility that they could be lower than reported due to the lack of comprehensive physical audits, fueling theories about discrepancies or even absences of gold. This does not imply intentional inflation of figures, but possible inaccuracies due to obsolete verification methods.
  
  • Key evidence: The absence of a complete physical audit since 1974 has led to speculation that reserves may be overestimated, i.e., lower than stated, which could erode confidence in the dollar and Treasury bonds. In 2025, the announcement of an audit by the Trump administration and the Department of Government Efficiency (DOGE) has intensified these debates, with gold prices rising to $2,963/ounce amid uncertainty.
    
    
  • Context of conspiracy theories: Figures such as Elon Musk have amplified doubts about the state of reserves at Fort Knox, suggesting possible deficiencies that would make the official figures exaggerated. Legislative proposals such as H.R. 3795 seek a full inventory by the Government Accountability Office (GAO), highlighting risks of overestimation that could weaken the dollar if lower reserves are confirmed.
    
    
  • Implications and balanced perspectives: If an overestimation (lower actual reserves) is verified, it could lead to dollar weakness, inflation, and global diversification toward alternatives such as Bitcoin. Sources such as the U.S. Treasury maintain that reserves are intact (valued at over $1 trillion at market prices in 2025), but admit that the book value ($11 billion) has been obsolete since 1973. There is no evidence of underreporting; critics point to possible exaggerations.

• In summary, yes, the potential inaccuracies follow that line: underreporting in China for strategic discretion, and overestimation in the US due to a lack of recent verification. This does not mean that there are confirmed errors, but rather that the prevailing suspicions point in those directions.
  
  

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Recommended reading. 

Of the many things I have read in my search for information to write this article, even though they deal with unrelated issues, I really liked this article. It analyzes all the geopolitical changes from the perspective of Argentina. Perhaps I liked it because it draws conclusions very similar to what we have been saying in our entries for years. It also summarizes them very well.

I also recommend this other article. It discusses a new way of sending energy from space to any point on Earth. If this can be done at an affordable cost, the changes in almost everything will be immense.

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As always, I welcome comments at my email address: pgr@pablogonzalez.org