China is planning to sell part of its US Treasury holdings and buy more Bitcoin and gold, according to BlackRock's Jay Jacobs in an interview with CNBC. He said central banks worldwide are slowly moving away from the US dollar, and now prefer assets like Bitcoin and gold. Bitcoin is attractive because it does well during uncertain times, unlike stocks and bonds which need stability to perform.
China’s Holdings
-
China holds about $784.3 billion in US Treasuries (as of February).
-
China’s gold is worth about $229.6 billion (as of March).
-
China also owns about 194,000 Bitcoin, valued around $18 billion.
Possible Impact on US Markets
Experts warn that if China sells lots of Treasuries and mortgage-backed securities (MBS), it could cause serious problems for US financial markets. Treasury securities help finance the US government, so a large sell-off could shake the system.
However, some experts believe China might be careful, because selling too much could hurt its own investments and cause big problems for global currencies. China also wants to keep its currency (the renminbi) weaker than the dollar to help its exports.
Effect on US Mortgage Rates
If China dumps MBS, US mortgage rates could jump higher. Adjustable-rate mortgage holders would be hit first, and refinancing would become harder and more expensive. First-time homebuyers could be priced out of the market, and banks might make it tougher to get a loan.
Why Bitcoin?
BlackRock says Bitcoin is becoming more popular because of rising global conflicts. Stocks and bonds need peace and stability, but Bitcoin can grow when there is more instability.
Disclaimer: This article is for information only and is not financial advice.
#China #Bitcoin #Gold #USTreasury #CryptoNews #FinancialNews
