Central Banks Could Hoard Bitcoin Within 5 Years, Deutsche Bank Forecasts

Deutsche Bank drops bombshell prediction about central bank Bitcoin accumulation.

The institutional dam breaks

Five years—that's the timeline Deutsche Bank puts on central banks finally joining the digital gold rush. No more watching from sidelines while private institutions stack SATs. The very entities that once dismissed cryptocurrency now eye Bitcoin as strategic reserve assets.

Global monetary chessboard reshuffles

Think about the implications: national treasuries allocating percentage points to Bitcoin reserves. Sovereign wealth funds diversifying beyond traditional assets. The move would validate Bitcoin's store-of-value thesis on unprecedented scale—while giving traditional finance purists collective heartburn.

Legacy finance's reluctant embrace

Watching central bankers navigate Bitcoin's volatility will be theater worth the admission price. They'll likely start with token allocations—pun intended—before gradually increasing exposure as regulatory frameworks solidify. The irony isn't lost on anyone: institutions created to maintain monetary stability turning to the asset they once called destabilizing.

Because nothing says 'sound monetary policy' like waiting until an asset appreciates 10,000% before declaring it worthy of consideration.

Central Banks Could Add Bitcoin

According to Deutsche Bank, Bitcoin’s market traits are shifting. Short-term volatility has fallen recently, and prices even topped $123,000 in the run-up to the report, signals the bank flagged as part of Bitcoin’s maturing profile.

While gold keeps drawing strong official demand, the report says central banks may begin treating bitcoin as a complementary store of value rather than a replacement for existing reserve assets.

The Bank’s View On Gold And Money

Deutsche Bank points out that Gold buying by official institutions remains robust. In fact, the bank has moved its own gold forecasts higher as bullion rallies, noting demand from some countries is running well above past averages.

This stronger taste for bullion is one reason the bank sees space for two scarce assets — physical gold and Bitcoin — to coexist in official portfolios.

Based on reports, one part of the argument rests on supply dynamics. Bitcoin’s fixed maximum supply — 21 million coins — and growing institutional accumulation have tightened available market supply in recent periods.

At the same time, the study notes Bitcoin’s 30-day volatility recently hit historic lows, a fact that analysts say reduces one major hurdle to reserve adoption.

Still, big price swings remain possible and WOULD be closely watched by any central bank considering a holdings shift.

Deutsche Bank compares Bitcoin’s likely adoption path to how gold entered reserves: slowly, with legal and operational processes built around custody, accounting and valuation.

Reports say the US dollar would remain dominant as the world’s main reserve currency, but some diversification into non-dollar assets could push officials to explore alternatives including Bitcoin.

Legal and technical issues are still on the table. Custody solutions must meet the security standards central banks require. Rules in many jurisdictions would need updating to allow sovereign institutions to hold crypto.

Political views will matter too; recent debates about central bank independence and rate policy have added friction to major reserve decisions, including concerns raised around actions by US President Donald TRUMP that some analysts say could influence monetary policy.

Featured image from Meta, chart from TradingView