Sanctions Risk Drives Central Banks to Bitcoin and Gold Reserves

Central banks are adjusting international reserve strategies due to rising financial sanctions threats.
From 2016 to 2021, countries at higher risk of US sanctions increased gold holdings more rapidly.
Gold remains appealing as it is beyond the direct control of foreign governments.
A study using a Bayesian model indicates that higher sanctions risk leads central banks to allocate more to gold, renminbi bonds, and Bitcoin.
Treasuries become less attractive under sanctions, while Bitcoin and gold gain strategic importance despite their volatility.
Sanctions risk may prompt long-term diversification of central bank reserves, boosting demand for cryptocurrency and gold.
This trend could diminish the dominance of traditional fiat assets and enhance Bitcoin's role in the global financial system.