Bitcoin has struggled in recent months after its price rally stalled (even as traders brace for a 2026 Wall Street bombshell).
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The bitcoin price topped $124,000 per bitcoin last month but has since dropped back with fears of a “death spiral” spooking bitcoin and crypto traders.
Now, as a $9.5 trillion “wall of cash” is on a collision course with bitcoin and crypto, analysts with Wall Street giant Deutsche Bank have predicted bitcoin could soon be on equal footing with gold on the Federal Reserve’s balance sheet.
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Federal Reserve chair Jerome Powell will see his term end next year, opening up the door for U.S. president Donald Trump to replace him with a pro-bitcoin alternative.
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“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,” Marion Laboure, research analyst at Deutsche Bank Research Institute, wrote in a note seen by CNBC.
“We conclude there is room for both gold and bitcoin to coexist on central bank balance sheets by 2030,” Laboure said.
The bitcoin price and the price of gold have rocketed higher this year, with gold’s market capitalization soaring to $25 trillion while bitcoin has topped $2.3 trillion.
This week, gold hit a fresh record, topping $3,700 as central banks around the world continue to add to their reserves while the U.S. dollar weakens and U.S. president Donald Trump’s trade policies upend the established financial order.
The bitcoin price and wider crypto market rocketed following Donald Trump’s election victory in November, with his landmark announcement in March that that the U.S. will create a bitcoin strategic reserve and a crypto stockpile further boosting prices.
Trump’s executive order calling for the creation of a bitcoin reserve was light on details but U.S. Treasury secretary Scott Bessent confirmed last month that the Trump administration is committed to finding budget-neutral ways of creating it.
“Treasury is committed to exploring budget-neutral pathways to acquire more bitcoin to expand the reserve, and to execute on the president’s promise to make the United States the ‘bitcoin superpower of the world,’” Bessent posted to X, calling the “bitcoin that has been finally forfeited to the federal government … the foundation of the strategic bitcoin reserve that president Trump established in his March executive order.”
The bitcoin price has dipped this week as traders digest the Fed’s September interest rate cut and economic data suggests it’s on track to cut rates again in October.
“Following last week’s Fed funding cut, futures positions have been reset and liquidity has returned to the market,” Gadi Chait, head of investment at Xapo Bank, said in emailed comments.
“Ultimately, for long-term investors, these swings are part of bitcoin’s normal rhythm. Its network remains the most secure, and adoption continues to deepen, both in a retail and institutional sense. Bitcoin is here to stay, and its next chapter is only beginning.”
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The bitcoin price hit an all-time high of $124,000 per bitcoin last month as traders bet the Federal Reserve will cut interest rates in the months ahead.
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Deutsche Bank analysts added that bitcoin can perform like gold as a store of value, with a low correlation to traditional assets making it attractive to central banks including the Federal Reserve.
“Bitcoin also has the potential to provide both an investment and a consumer-good value. As such, like gold, bitcoin’s long-term performance may also be supported by income growth,” Laboure wrote. “This explains why when equities rally strongly, their correlation to bitcoin can rise.”
In August, a research paper from the Fed outlined how the U.S. government could revalue its gold holdings to increase its book value to $750 billion, up from just $11 billion.
The note pointed to how five other countries have used gains on their official gold holdings to raise funds.
Earlier this month, a top advisor to Russia’s president Vladimir Putin has said that the U.S. under president Donald Trump wants to use crypto to “erase its massive debt at the world’s expense” and reset the financial system in its favor.
“The U.S. is now trying to rewrite the rules of the gold and cryptocurrency markets,” Anton Kobyakov, a top advisor to Russia’s president Vladimir Putin, said at the Eastern Economic Forum in comments translated by Russia Direct and posted to X. “Remember the size of their debt—$35 trillion. These two sectors (crypto and gold) are essentially alternatives to the traditional global currency system.”
Last year, during the election campaign, Trump floated the possibility of using bitcoin to pay off the U.S.’s $35 trillion debt pile, telling Fox Business that, “maybe we’ll pay off our $35 trillion, hand them a little crypto check, right?”