Bitcoin News Today: Central Banks Shift Reserves to Gold as Dollar Devaluation Fears Intensify

Gold prices have surged to record highs in 2025, with the precious metal reaching $3,659 per ounce in September, driven by robust central bank demand, inflationary pressures, and geopolitical uncertainties. Analysts predict gold could surpass $4,000 per ounce amid growing investor appetite for safe-haven assets. The U.S. debt crisis, which has ballooned to $37 trillion, has intensified concerns about fiat currency devaluation, further bolstering gold's appeal as a hedge against systemic risk. Central banks, including those in China, India, and Russia, have significantly increased gold purchases since 2023, with foreign reserves now exceeding U.S. Treasury holdings for the first time since 1996Record Gold Rally Fuels Bitcoin Forecasts of $185K in Q4 2025^[3].

The surge in gold is also attributed to its inflation-adjusted performance. In September 2025, gold broke above its 1980 peak, marking the end of a 45-year consolidation periodRecord Gold Rally Fuels Bitcoin Forecasts of $185K in Q4 2025^[3]. This milestone reflects a broader erosion of confidence in the global monetary system, exacerbated by U.S. fiscal deficits, geopolitical tensions, and record central bank gold purchases from emerging markets. Ray Dalio of Bridgewater Associates highlighted the stagflationary risks posed by global debt burdens, noting that gold's role as a store of value is likely to strengthen as the U.S. dollar faces devaluation pressuresRecord Gold Rally Fuels Bitcoin Forecasts of $185K in Q4 2025^[3].

Retail demand has also played a critical role in gold's rally. In China, 81% of respondents in a 2025 World Gold Council survey reported owning gold jewelry, indicating a vast base of individual investors prioritizing tangible assetsGold Surges Ahead of Bitcoin, But For How Long?^[1]. This contrasts with Bitcoin's 295 million global owners, underscoring gold's broader accessibility and cultural significance in markets like China. Meanwhile, institutional investors, including pension funds and central banks, are increasingly allocating to gold as a counterbalance to U.S. dollar volatility. The Financial Times noted that central banks' gold holdings are poised to exceed their U.S. Treasury positions, signaling a strategic shift in reserve managementGold Surges Ahead of Bitcoin, But For How Long?^[1].

Analysts have drawn correlations between gold and Bitcoin, with some suggesting Bitcoin could follow gold's upward trajectory. Joe Consorti, a Bitcoin analyst, observed that gold typically leads Bitcoin by 100 days due to its greater liquidity and distribution. Tephra Digital reinforced this view, forecasting that Bitcoin could reach $167,000–$185,000 in Q4 2025 if historical correlations with gold and global M2 money supply holdRecord Gold Rally Fuels Bitcoin Forecasts of $185K in Q4 2025^[3]. However, gold's current dominance is attributed to its established role in institutional portfolios and its ability to attract capital during periods of systemic uncertainty.

Despite optimism, challenges persist. Silver's recent surge to $41 per ounce has sparked debates about capital rotation into traditional safe havens, potentially diverting flows from Bitcoin. Additionally, Bitcoin's valuation in gold terms remains 16% below its 2021 peak, indicating a trend where investors favor gold over digital assetsRecord Gold Rally Fuels Bitcoin Forecasts of $185K in Q4 2025^[3]. Experts caution that while gold's rally is rooted in tangible macroeconomic factors, Bitcoin's volatility and regulatory uncertainties could limit its appeal in the short term.

The U.S. debt crisis has also spurred policy shifts, including President Donald Trump's establishment of the Strategic Bitcoin Reserve in March 2025. This initiative, which includes Bitcoin, Solana, and Ethereum, aims to diversify U.S. reserves and position the country as the "crypto capital of the world." However, gold remains a cornerstone of central bank strategies, with countries like El Salvador and Bhutan already accumulating significant reservesU.S. Strategic Bitcoin Reserve - Wikipedia^[7]. The interplay between gold, Bitcoin, and U.S. fiscal policy will likely shape global markets in 2026–2027, as investors navigate a landscape of inflation, debt, and technological disruption.