The Impact of G8’s Gold Reallocation on Bitcoin

Matthew Sigel, head of digital asset research at VanEck, explains how reallocating just 5% of the G8’s gold reserves could significantly affect Bitcoin supply.

The world is gradually embracing Bitcoin and digital assets, moving away from the perception of them being speculative. Bitcoin has established itself as a store of value, often referred to as digital gold.

Following Donald Trump‘s proposal for a national Bitcoin stockpile, the idea of holding Bitcoin as a reserve asset has gained traction globally. While the United States has not yet formed such a reserve, other nations are proactively considering adoption.

Pro-Bitcoin Republican Senator Cynthia Lummis has hinted at reallocating some U.S. gold reserves to Bitcoin, envisioning it as a practical strategy for creating a Bitcoin reserve asset. Matthew Sigel has analyzed the liquidity this approach could generate for Bitcoin.

G8 Countries’ 5% Reallocation

Sigel did not limit his analysis to the U.S.; he examined potential impacts among the G8 nations, comprised of the world’s most advanced economies. Recently, he posited that if these countries shifted merely 5% of their gold reserves to Bitcoin, it would surpass the U.S. in spot exchange-traded funds (ETFs), making these products the biggest holders of Bitcoin.

The G8 includes the United States, Germany, Italy, France, Russia, China, Switzerland, and Japan, collectively holding over 30,000 tons of gold valued at about $2.9 trillion.

G8 Reallocation Impact

Allocating just 5% of their gold to Bitcoin could hypothetically infuse $145 billion into the market. At current prices, this investment would approximate 1.48 million BTC, representing over 5% of Bitcoin’s total supply.

Is It Feasible?

Among the G8, currently, only the U.S., Russia, Switzerland, and Japan maintain favorable views toward Bitcoin. Discussions regarding a national Bitcoin reserve are ongoing in the U.S., Russia, and Switzerland, while Japan has only recently become more receptive to digital currencies.

In contrast, China has outright banned crypto on its mainland, with other G8 members exhibiting reluctance toward Bitcoin. Nevertheless, as innovation continues to rise, the potential for reallocating gold reserves cannot be dismissed entirely.