Bitcoin will “coexist with gold” on central bank balance sheets as soon as 2030, one of the world’s largest banks has predicted, as banks’ continued move away from the dollar and the cryptocurrency’s falling volatility boost its credentials as a reserve currency.
Strategists at Deutsche Bank predicted that bitcoin “will join gold in many central banks’ official reserves” as lenders of last resort hunt for “alternative currencies” to shore up their reserves.
“Bitcoin and gold are complementary diversifications to central bank portfolios,” they wrote in a note. “[They] are deemed complementary alternatives to traditional safe-haven reserves due to their low correlation with other asset classes, relatively scarce supply, and use as a hedge against inflation and geopolitical volatility.”
The prediction comes despite several central banks – including the Swiss, German and US central banks – ruling out bolstering their reserves with crypto, with many having constitutions or mandates that prohibit it.
But central banks across the world have been buying up gold at an unprecedented rate in recent years, as they hunt for ways to diversify against the US dollar. That trend, which has seen central bank gold purchases remain at their highest rate in more than half a century after more than doubling between 2021 and 2022, is likely to continue over the next decade, the Deutsche analysts claimed, pushing gold beyond $4,000/oz by the end of the year.
The bank cited China’s decision last year to reduce its holdings of US Treasuries – the name for American government bonds – by $57bn (£42.2bn) as evidence of ongoing so-called de-dollarisation, a trend which it said was accelerating in the wake of “Trump’s Liberation Day tariffs”.
Dollar decline sparks record gold and bitcoin rallies
Investors’ shift away from the dollar has helped drive record performance in both gold and bitcoin across 2025, as investors look for liquid alternatives to the US currency.
This, combined with growing uptake in bitcoin driving down the cryptocurrency’s volatility, will make the asset class more attractive to central banks in an era of “high inflation [and] geopolitical instability”.
The vast and sudden fluctuations in bitcoin’s valuation have so far led most institutional investors and large financial institutions to swerve the cryptocurrency. But Deutsche Bank predicted this volatility was likely to decline thanks to more widespread adoption boosting bitcoin’s liquidity and a flurry of financial watchdogs facilitating and regulating crypto.
“Bitcoin still lacks key components of a reserve asset: trust and transparency,” they wrote. “However, as history has shown, during the early stages of its adoption gold was also prone to price sensitivity, and gold’s volatility has declined over time.
“With regulatory efforts accelerating… we expect bitcoin’s volatility to decline as more transactions are conducted, ensuring deeper liquidity in the markets.”