National level approval! US Treasury Department: BTC is digital gold, the trend of gold + blockchain is coming

The US official for the first time explicitly positioned BTC as "digital gold"

In the latest quarterly report for Q4 2024, the US Treasury Department explicitly describes BTC as 'digital gold'. The report states that BTC (Bitcoin) is gradually playing a role similar to traditional gold in the Decentralized Finance (DeFi) ecosystem - as a store of value.

Image source: US Department of the Treasury The US Department of the Treasury explicitly describes BTC as "digital gold" in its latest report.

This national-level recognition not only shows that the authorities have begun to take the influence of Virtual Money on the global financial system seriously, but also provides investors with a new choice in a turbulent economic environment. The US Treasury emphasized that although BTC still has a considerable speculative component, its characteristics of combating inflation and hedging demand have become increasingly prominent, especially in recent years, as more and more institutions and companies have regarded it as a safe haven similar to gold. Federal Reserve Chairman Powell also recently stated that although BTC is not a legal currency, it is more like gold than the US dollar, further confirming this view.

Digital assets surged, and market capitalization soared. Stablecoins worth trillions became a key factor.

The report from the US Treasury Department also points out that the growth of BTC and other virtual currencies, although starting from a small point, has now risen to a huge market value. Compared to the market cap of only about 6.4 million in 2015, BTC had grown to about 194 billion in 2019, and now it has reached about 2.3 trillion. Recently, the price has even surpassed the $100,000 mark, setting a new milestone. As BTC attracts more and more investors, market participants, including companies, are gradually incorporating it into their balance sheets in order to gain a leading position in global capital allocation.

In addition to BTC, the report also mentions Stable Coin as another rapidly growing digital asset category. Stable Coins are mostly backed by Fiat Currency or US Treasury bonds, and currently about 120 billion yuan of Stable Coin collateral has been directly invested in US Treasury-related assets. This phenomenon represents not only the provision of Liquidity to the digital coin market by Stable Coins, but also the Reverse driving demand for short-term US Treasury bonds, further consolidating the core position of the Treasury market in the global financial system.

Source: US Treasury Department. The report also mentions Stablecoin as another rapidly growing digital asset category.

After official recognition, TradFi is gradually integrating with blockchain technology

Although the U.S. Department of the Treasury acknowledges the 'digital gold' status of BTC, the report also emphasizes that the digital asset market is still in its early stages and is far smaller than TradFi and physical assets. The motivation for most households and businesses to get involved in the digital asset market is still primarily investment-oriented, and speculative psychology has contributed to price fluctuations and market expansion. However, the report also points out that blockchain and distributed ledger technology (DLT) have shown potential for improving financial market settlement and clearing processes, and are expected to further reduce intermediation costs, enhance capital flow, and efficiency in the future.

Image Source: US Department of the Treasury The similarities between the digital asset ecosystem and the existing financial markets

It is worth noting that the Ministry of Finance is not worried about the impact of the rise of digital assets on the demand for US government bonds. It emphasizes that even if BTC, Ethereum, and various stablecoins become emerging investment targets, government bonds are still an important option for global fund hedging and capital allocation. With the increasing maturity of digital currencies, officials expect the overall market to continue to grow in the future, but they also caution that the demand for Risk Management and Fluctuation in the potential market will increase relatively. With BTC gaining national recognition, its title as 'digital gold' may just be the beginning, and the interaction between TradFi and digital assets in the future is expected to become even closer.

Further reading The U.S. Department of the Treasury released a major report! Be cautious in using Stable Coin, CBDC is the future

[Disclaimer] There are risks in the market, and investment should be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this is at your own risk.

『National recognition! U.S. Department of the Treasury: BTC is digital gold, gold + Block chain trend is coming" This article was first published in "encryption city"