NEW YORK–Deutsche Bank is predicting Bitcoin could be added to central bank reserves by 2030, similar to gold, even though it is not “backed by anything.”
“A strategic Bitcoin allocation could emerge as a modern cornerstone of financial security, echoing gold’s role in the 20th century,” wrote Deutche Bank analysts Marion Laboure and Camilla Siazon in a research deck. “Assessing volatility, liquidity, strategic value and trust, we find that both assets will likely feature on central bank balance sheets by 2030.”
The researchers’ argument is based on the fact that gold (a common central bank asset) and Bitcoin have both risen precipitously in price over the last few years.
Another Factor at Work
There’s another factor favoring Bitcoin right now, according to the researchers: companies that have created “Bitcoin treasuries” on their balance sheet. Hundreds of companies now count Bitcoin as an asset.
Laboure’s and Siazon’s theory is that as Bitcoin behaves more like gold, and as central banks seek assets that don’t move in tandem with other assets, they’ll be tempted to add crypto. But there is one catch, they note, which is that technically, Bitcoin is not an asset. It’s merely a piece of computer code signalling a price. Unlike cash, bonds, property or stocks, Bitcoin does not entitle the owner to any underlying asset, interest, or cash flow, the researchers pointed out.
The Counter-Argument
“The main counter-argument is that Bitcoin – backed by nothing – is too volatile for long-term value,” Laboure and Siazon admit. “Yet, its volatility has now fallen to historic lows.” Gold prices have now risen more than 50% this year, creating what analysts have called a “weird theme of the markets right now:” Investors are optimistic
