Central Banks Diversify: Bitcoin and Gold Hedge Dollar Decline, Inflation

Deutsche Bank has forecasted that Bitcoin could coexist with gold in central bank reserves by 2030, positioning both assets as complementary hedges against inflation and geopolitical risks. The bank’s report, released in September 2025, highlights Bitcoin’s declining volatility and growing institutional adoption as key drivers for its potential inclusion alongside gold in official portfolios. While gold remains the dominant reserve asset, with central banks holding over 95% of its total supply and prices hitting record highs, Bitcoin’s market capitalization of $2.2 trillion and limited supply dynamics are attracting sovereign interest. The report emphasizes that neither asset is expected to displace the U.S. dollar, which still constitutes 57% of global reserves, though diversification trends are evident, including a $57 billion drop in China’s U.S. Treasury holdings in 2024 Coindesk: Bitcoin to Join Gold on Central Bank Reserve Balance Sheets by 2030^[1].

The report draws parallels between Bitcoin’s trajectory and gold’s historical adoption. Gold faced skepticism in its early days but became a cornerstone of global stability, valued at over $20 trillion. Bitcoin’s 30-day volatility has reached historic lows despite record price highs, suggesting maturation from speculative trading to a more stable store of value. This shift is attributed to regulatory clarity, macroeconomic tailwinds, and increased liquidity, which mirror the factors that bolstered gold’s acceptance. Deutsche Bank analysts note that Bitcoin’s scarcity—only 5% of its 21 million supply remaining to be mined over the next century—reinforces its appeal as a hedge, akin to gold’s finite nature Coinedition: Bitcoin and Gold May Coexist on Central Bank Balance Sheets^[2].

Central banks are increasingly reevaluating their reserve compositions amid rising inflation, geopolitical instability, and evolving monetary policies. The World Council reported in 2025 that 43% of central banks plan to increase gold reserves within a year, while 95% anticipate global reserve growth. Bitcoin’s emergence as a macro hedge is also gaining traction. Over 180 companies have added Bitcoin to their balance sheets, and prominent figures like Eric Trump have endorsed its potential as a diversification tool. Deutsche Bank argues that a strategic allocation to Bitcoin could complement traditional reserves, leveraging its low correlation with fiat currencies and other assets Thecryptobasic: Bitcoin Will Coexist with Gold in Central Banks’ Balance Sheets^[3].

The dollar’s dominance in reserves has declined from 60% in 2000 to 43% in 2024, prompting central banks to explore alternatives. Bitcoin’s adoption aligns with broader efforts to reduce reliance on the U.S. currency. The bank’s analysis suggests that Bitcoin and gold will not replace the dollar but will gradually erode its share by offering alternative stores of value. This trend is supported by regulatory momentum in major markets and the growing acceptance of digital assets as part of a diversified portfolio. The report also notes that Bitcoin’s volatility, while historically high, has normalized, making it more palatable for institutional adoption Coindesk: Bitcoin to Join Gold on Central Bank Reserve Balance Sheets by 2030^[1].

Looking ahead, Deutsche Bank envisions Bitcoin following a similar path to gold’s acceptance, transitioning from skepticism to widespread recognition. The bank’s analysts project that Bitcoin’s price could surge to $203,500–$275,145 by 2030, with some forecasts reaching $2.4 million under bullish scenarios. This growth is underpinned by Bitcoin’s scarcity, its role in hedging against inflation, and its potential to integrate into central bank balance sheets. The report concludes that as long as human behavior drives financial decisions, Bitcoin and other alternative assets will continue to compete for attention, reshaping the global financial landscape Coinedition: Bitcoin and Gold May Coexist on Central Bank Balance Sheets^[2].