US reserves status quo: Gold, oil and the emerging role of Bitcoin The US government has long relie
US reserves status quo: Gold, oil and the emerging role of Bitcoin
The US government has long relied on gold and oil as reserve assets, but with the growing institutional adoption of Bitcoin (BTC), its potential role as a strategic reserve has increased substantially. This possibility and potential of the Bitcoin strategic reserve have seen a major tailwind as the new administration took charge in the US in January 2025.
While gold has historically backed monetary systems and oil remains a key economic and security asset, Bitcoin represents a new kind of digital reserve that challenges traditional financial paradigms.
The United States holds substantial reserves in gold and oil, but its Bitcoin holdings are comparatively small and primarily acquired through asset seizures. As of the third quarter of 2024, the US holds approximately 8,133.46 metric tons of gold, valued at around $789. 87 billion (on March 8, 2025), making it the largest sovereign holder of gold reserves.
These reserves have historically been used as a hedge against economic uncertainty and to back the dollar before the gold standard was abandoned in 1971.
In the case of oil, the US maintains a Strategic Petroleum Reserve (SPR), which, as of August 2024, holds around 372 million barrels. The SPR was established in the 1970s in response to the oil crisis and is valued at approximately $28 billion at current market prices. These reserves manage supply disruptions, control inflationary pressures, and stabilize energy markets during geopolitical crises.
Bitcoin, unlike gold and oil, is not an official reserve asset, but the US government possesses a significant amount through confiscations. Estimates suggest the government controls roughly 200,000 BTC, worth around $15.90 billion at a Bitcoin price of $79,515 (as of March 10).
However, unlike gold and oil, these holdings are not stored as strategic reserves but rather as assets pending auction or liquidation by the Department of Justice and the US Marshals Service.
Liquidity and market dynamics of gold, oil and Bitcoin
Gold, oil and Bitcoin each exhibit unique liquidity and market dynamics, with gold being the stablest, oil driven by geopolitical factors and Bitcoin characterized by high volatility and 24/7 accessibility.
The depth of liquidity of an asset in a market is an extremely important indicator of the asset’s health. Typically, the higher the liquidity, the better the options investors have around pricing and risk management.
Let’s understand how gold, oil and Bitcoin differ from each other in terms of liquidity and market dynamics:
- Gold: It remains one of the most liquid financial assets, with daily trading volumes exceeding $200 billion across futures markets, exchange-traded funds (ETFs) and over-the-counter (OTC) trades. Its deep liquidity and universal recognition make it a preferred asset for central banks, institutional investors and governments looking to hedge against inflation and currency fluctuations. While gold’s price varies, it has historically maintained lower volatility than most other assets.
- Oil: It is traded at immense volumes in both spot and futures markets, with daily future volumes reaching about 1 million barrels globally. Unlike gold, oil’s liquidity is largely tied to its industrial demand and geopolitical developments. The price of oil is highly sensitive to supply chain disruptions, the Organization of the Petroleum Exporting Countries (OPEC) decisions and macroeconomic policies. Given its role in energy markets, oil volatility is much higher than gold, with price swings that can result from political instability, production cuts or major conflicts.
- Bitcoin: Bitcoin, despite being a relatively new asset, is highly liquid, with daily trading volumes often exceeding $30 billion–$50 billion across global exchanges. While BTC has gained legitimacy among institutional investors, it remains significantly more volatile than gold and oil due to speculative demand, regulatory uncertainty and market structure. Unlike gold and oil, Bitcoin operates on a 24/7 trading cycle, making it unique in terms of accessibility and global liquidity.
Storage and security concerns for reserve assets
Storage and security concerns are crucial for any reserve asset, with each asset presenting unique challenges and costs.
- Gold: It is typically stored in highly secure facilities such as Fort Knox, the Federal Reserve Bank of New York and other vaults worldwide. The cost of storing gold varies, but large-scale sovereign reserves require substantial security infrastructure, transportation costs and insurance. Additionally, physical gold is vulnerable to theft and requires constant auditing to ensure authenticity and weight accuracy. Plus, custody fees for…
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