China has told major banks to reduce new U.S. bond purchases, citing increased market volatility risks.
China’s holdings of U.S. Treasuries have fallen to a 17-year low as it diversifies into gold and other assets.
Bitcoin and cryptocurrencies are considered alternative assets as investors move from fixed income to mold stores.
China has ordered major banks to reduce their holdings of US debt, signaling a major shift in global finance. The move reflects growing concerns about U.S. debt risk and market volatility.
Experts believe that this decision could create new opportunities for Bitcoin and the crypto market as a whole.
China orders banks to reduce exposure to US Treasuries
Chinese regulators have reportedly warned banks about “concentration risk” and increased volatility in U.S. Treasuries. Financial institutions are advised to reduce excessive positions and limit further purchases.
China’s holdings of U.S. debt have already been declining for years. The country currently holds about $682.6 billion in U.S. debt, according to official data, the lowest level in 17 years and well below the $1.3 trillion peak 10 years ago.
breaking news:
🇨🇳China orders state-owned banks to reduce their holdings of US debt as it hits a 17-year low. pic.twitter.com/VpQD3cxdCr
— Ash Crypto (@AshCrypto) February 9, 2026
Over the past 14 years, China has steadily increased its gold reserves while reducing the US debt by more than $500 billion.
In fact, the Chinese government has been buying gold for 18 consecutive months, demonstrating a clear preference for real assets over government bonds.
China’s exit from long-term US debt
Importantly, the order does not affect China’s official foreign exchange reserves held by the central bank. Instead, it is targeting commercial banks and their growing exposure to dollar-denominated assets.
The traditional support system for U.S. Treasuries is weakening as China steps back from being one of the biggest buyers of U.S. Treasuries.
The absence of such large buyers could lead to more volatility in the bond market and higher interest rates.
What this means for Bitcoin and cryptocurrencies
Investors are looking for safer options. In the past, gold has benefited most from this trend. Gold prices have risen nearly 72% in a year, recently hitting an all-time high of about $5,600. Prices are currently falling as some investors book profits.
Typically, after gold peaks, investors move some of their funds into Bitcoin. This is because Bitcoin is considered a digital store of value, similar to gold.
Bitcoin is currently trading around $69,712, down from its all-time high of $126,000. Many investors view this as a cheap buy level.
Other major cryptocurrencies such as ETH, SOL, XRP, ADA, and Doge are also down 40% to 70% from their highs. This market decline has made crypto assets more attractive to long-term buyers.
