Central banks and global policymakers are increasingly engaging in discussions about Bitcoin as a potential reserve asset, though gold remains the dominant hedge against a weakening U.S. dollar. BlackRock’s July 2025 report underscores de-dollarization as a tangible trend, driven by geopolitical tensions, inflation, and eroding confidence in U.S. debt. The report notes that central banks have accelerated gold purchases to record levels, with total holdings nearing 36,000 metric tons—approaching levels not seen in over 50 years. Meanwhile, Bitcoin’s growing institutional acceptance and regulatory clarity are positioning it as a speculative but evolving contender in the reserve asset landscape.

Gold currently accounts for roughly 20% of global reserves, while the dollar’s share has declined to 46%. Central banks are diversifying into alternative assets, with the euro at 16% and other currencies at 18%. The World Gold Council reported first-quarter 2025 purchases of 244 metric tons, with emerging markets like Kazakhstan, Turkey, and Poland leading the trend. China’s central bank has steadily increased its gold reserves, from 2,000 metric tons in late 2022 to 2,299 metric tons by mid-2025. Analysts suggest China’s actual holdings may be higher, citing import activity and off-balance-sheet storage [1].

Bitcoin’s role in reserve discussions is still nascent but gaining traction. The Czech National Bank initiated a formal review of Bitcoin’s potential in early 2025, considering up to 5% of its €140 billion portfolio. Citizen campaigns in Switzerland have also pushed for modest Bitcoin allocations. However, a 2025 survey by Central Banking Publications revealed that 93% of central banks had no plans to include digital assets in their reserves, citing volatility, liquidity risks, and regulatory uncertainties. Despite this, non-central entities are experimenting: the U.S. government established a Strategic Bitcoin Reserve with 200,000 seized Bitcoins, while Texas and Pakistan have launched their own initiatives.

Bitcoin’s price surge in 2025, reaching $123,000 in July, has amplified its visibility. Institutional inflows exceeding $50 billion, led by BlackRock’s iShares Bitcoin Trust, highlight its institutional adoption. Regulatory progress, including the U.S. passing the CLARITY and GENIUS Acts, has added legitimacy to the asset. While Bitcoin’s volatility relative to equities has decreased, central banks remain cautious, favoring assets with established track records and mature oversight.

The de-dollarization narrative is further reinforced by U.S. President Donald Trump’s public acknowledgment of the economic benefits of a weaker dollar. The U.S. dollar has fallen over 10% in six months, mirroring the 1973 post-gold standard decline. This shift has fueled demand for alternatives like gold and Bitcoin, with gold prices peaking at $3,500 per troy ounce in April. Metals Focus estimates global gold purchases at $80 billion for 2025, with further growth anticipated in 2026.

Bitcoin’s potential as a reserve asset hinges on its ability to address liquidity, custody, and cybersecurity challenges. While central banks have not yet adopted it, sub-sovereign entities and smaller nations like El Salvador and Bhutan are exploring its strategic value. El Salvador holds over 6,000 BTC, though usage has waned due to IMF negotiations. Bhutan’s Bitcoin reserve accounts for nearly 28% of its GDP, illustrating how energy-advantaged nations leverage digital assets.

The evolving landscape reflects a broader reevaluation of reserve strategies. Central banks are diversifying beyond gold and fiat currencies, closely monitoring Bitcoin’s maturation as a decentralized store of value. However, widespread adoption remains distant, constrained by structural limitations and risk aversion. For now, gold retains its supremacy, while Bitcoin’s role is confined to niche, experimental allocations.

Source: [1] https://coinmarketcap.com/community/articles/68852f09cd505a2fad82d500/