Bitcoin continues to surge into the mainstream, as central banks may soon hold it alongside gold in their official reserves.
According to new research from Deutsche Bank, by 2030 digital assets could play a role in diversifying financial reserves.
Gold will likely continue to remain the traditional hedge, reaching a record $3,703 per ounce in September. But at the same time, bitcoin is climbing near its all-time high after surpassing $123,500 in August. Analysts have also noted that the digital coin's volatility has cooled to historic lows. Bitcoin is now more appealing than ever as a potential reserve asset.
"While gold has long been the standard alternative, the Trump administration's landmark decision to establish a U.S. strategic reserve this past March reignites the argument for central banks to hold bitcoin as a reserve asset," Deutsche Bank stated.
For decades, central banks have relied on gold as a safe-haven asset. However, the global share of U.S. dollars in reserves has fallen from 60% in 2004 to 43% in 2024. That means central banks need to seek alternative assets to diversify their holdings.
Marion Laboure and Camilla Siazon, the report's authors, say that gold and bitcoin share traits such as scarcity, a low correlation with traditional investments, and inflation hedges. They argue bitcoin could follow a path similar to gold, which also faced skepticism and volatility in its early adoption.
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The prospect that bitcoin will enter central bank reserves raises questions about the crypto's environmental footprint.
Bitcoin mining is energy-intensive and has long faced criticism for its reliance on fossil fuels. At the same time, the sector is experimenting with renewable energy solutions. Some alternatives involve mining operations that receive power from excess wind, solar, or hydroelectric generation.
Still, trust and transparency remain a hurdle for bitcoin before it can be widely recognized as a central bank reserve asset. "Countries will ensure that bitcoin and other digital assets do not threaten the sovereignty of their currencies," the report warned.
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