A look at the US-China rivalry: China's Central Bank has increased its gold holdings for eight consecutive months, and Trump Organization's Bitcoin ETF is entering the approval process.

In today's increasingly complex global economic landscape, a strategic hedging competition is quietly unfolding between the two major economies of the United States and China. This competition is not only reflected in traditional trade and geopolitical spheres but also extends to emerging financial battlegrounds such as gold reserves and crypto assets. The People's Bank of China (China's Central Bank, PBOC) has increased its gold holdings for eight consecutive months, quietly entering the ranks of the world's largest gold reserves. At the same time, the U.S. Securities and Exchange Commission (SEC) has accepted Bitcoin and Ethereum ETF applications from the Trump Media Company, signaling a deepening integration of crypto assets with U.S. politics. These two major events collectively reveal the growing importance of gold and crypto assets as strategic hedging tools within the global financial system.

1. People's Bank of China: Strategic Hedging of Gold Reserves

The People's Bank of China’s endless gold purchasing behavior far exceeds the traditional slogan of "buying gold during market turmoil."

Reducing Dependence on the Dollar: By increasing its gold reserves, China is quietly reducing its reliance on the dollar. This is a bet on future currency fluctuations and geopolitical challenges.

Mitigating RMB fluctuations: Economic slowdown, trade disputes, and the divergence of global monetary policies have put downward pressure on the RMB. Holding a large amount of gold reserves gives China greater flexibility. This will help stabilize the RMB and avoid drawing attention or triggering panic.

2. United States: Trump Media Company Bitcoin ETF Under Review

The U.S. Securities and Exchange Commission (SEC) has recently officially accepted the application for a Bitcoin and Ethereum exchange-traded fund (ETF) from Trump Media, marking the formal start of the agency's clock to approve or reject the proposed fund. This application is not only a significant development in the crypto assets market but also signifies the deep integration of crypto assets with U.S. politics.

Fund Structure and Custody: This ETF proposes to provide investors exposure to Bitcoin (BTC) and Ethereum (ETH) through shares listed on the New York Stock Exchange Arca, backed by crypto assets, with 75% allocated to Bitcoin and 25% allocated to Ethereum. The ETF will be custodied by Foris DAX Trust Company, and the asset management company Yorkville America Digital will act as the fund sponsor.

The significance of Trump Media: The launch of multiple ETFs focused on crypto assets may spark strong interest in Trump Media stocks, making them a more attractive option for crypto investors. However, this is unlikely to significantly improve the company's financial situation, as it remains a very low-margin, cash-burning business. This crypto strategy could overall make Trump Media stocks a more volatile and speculative investment.

SEC's Positive Signals on Crypto ETF: This application was submitted against the backdrop of a large influx of other crypto ETF applications. Reports suggest that the SEC is exploring a simplified listing structure for crypto ETFs, which would automate a significant portion of the approval process. Although other applications, such as the Solana ETF, still face delays, any form of interaction between the SEC and issuers/exchanges should be viewed positively.

Trump Administration's Crypto Agenda and the Future of Bitcoin: Two major developments are set to occur in July that could affect Bitcoin's future in the United States. In addition to the Truth Social ETF application, the Trump administration is preparing to release a comprehensive Bitcoin and digital asset policy document around July 22. White House sources indicate that the document may include recommendations for creating a strategic Bitcoin reserve—potentially emulating El Salvador's model on a larger scale. Additionally, the document could contain proposals aimed at ensuring that crypto assets companies gain fair banking services through the Federal Reserve's infrastructure.

3. Comparison of Gold and Crypto Assets in Hedging Competitions

It is not just China that is engaging in hedging; globally, interest in alternative assets is booming. The World Gold Council (WGC) reported that interest in gold from the retail sector weakened in May, but purchases at the government level remain strong. All this gold comes from various Central Banks and not from the general public.

At the same time, despite encountering some sell-offs, Bitcoin still holds steady at around $108,000. Its solid momentum reflects the increasing acceptance of Bitcoin by institutions and investors seeking portfolio protection. Gold has stability, a long history, and hundreds of years of trust. Crypto Assets, on the other hand, offer accessibility, transparency, and faster global transfer speeds; it is a modern universal card in the Hedging toolbox.

Conclusion:

China's strong push for growth in gold reserves marks a crucial shift: even the most powerful economies are doubling down on diversification. This is vital for the global financial ecosystem, including Crypto Assets. The adoption rate of Bitcoin among publicly listed companies is rising, and interest from regulated funds is growing. These boardroom discussions are all tied to the same trend: constructing stability in a turbulent world. When large banks like the People's Bank of China lean towards diversification, other institutions also take notice.

China's obsession with gold has opened broader doors for it, as various Central Banks embrace different value storage methods, facilitating the entry of digital assets into the same discussion arena. In contrast, in the United States, crypto assets are becoming part of a widely accepted "Hedging tool." For cryptocurrency investors, this is a signal: the narrative is shifting. This is not just speculation; it is a strategy.