The price of Bitcoin briefly topped $125,000 yesterday, a new record high. And as its price goes up, its relative volatility declines, a new analysis by Deutsche Bank argues. That factor is making Bitcoin more like gold—an asset that has a fixed supply and a low price correlation with other assets.
And that in turn increasingly makes Bitcoin a candidate to be added to central bank reserve assets, according to Deutche analysts Marion Laboure and Camilla Siazon.
“A strategic Bitcoin allocation could emerge as a modern cornerstone of financial security, echoing gold’s role in the 20th century. Assessing volatility, liquidity, strategic value and trust, we find that both assets will likely feature on central bank balance sheets by 2030,” they said in a research slide deck Tuesday.
Their 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. They produced this chart. (Note the differing vertical axes, which are flattering to the price of gold):
There’s another factor favoring Bitcoin right now: Companies that have created “Bitcoin treasuries” on their balance sheet. Hundreds of companies now count Bitcoin as an asset, most famously Michael Saylor’s Strategy, whose entire strategy is to buy more Bitcoin.
