"Digital Gold" and "Physical Gold" join forces for a wild ride? Deutsche Bank's bold prediction: Bitcoin and gold will coexist in central bank reserves by 2030

According to the Zhitong Finance APP, gold is undoubtedly rapidly consolidating its "ultimate safe-haven status" for 2025, having reached a new historical high this Tuesday. The core factors driving gold purchasing demand include the market's dovish expectations for further interest rate cuts by the Federal Reserve, the continued strong global central bank gold purchasing demand, substantial safe-haven buying driven by discussions about the independence of the Federal Reserve, and geopolitical concerns. Regarding the future outlook for gold, Wall Street financial giants are becoming increasingly aggressive, recently raising their target prices for gold for this year and next year. The price of $4,000, which seemed far-fetched at the beginning of the year, has now become the "new anchor" for gold on Wall Street.

At the same time, another safe haven known as the "newly emerging safe-haven asset" — Bitcoin (BTC-USD) — has stabilized quickly after a sharp drop on Monday, remaining above the $110,000 mark. A recent study by Deutsche Bank shows that the price of this cryptocurrency indicates an increase in institutional adoption and has the potential to gain macro hedging status. The institution even predicts that by 2030, gold and Bitcoin will coexist in the global central bank reserve system.

In terms of safe-haven status, "digital gold" Bitcoin has often been compared to "physical gold" — that is, gold — in recent years. But which of the two has stronger safe-haven value and greater influence in the safe-haven market? Deutsche Bank analyst Marion Laboure stated that by 2030, the safe-haven status of both will be nearly equal, and it is expected that both gold and Bitcoin will have a place on central bank balance sheets, allowing them to coexist perfectly.

"2025 will prove to be an excellent year for the demand for both Bitcoin and gold. The weakening dollar, new geopolitical pressures, tariff policy uncertainties, and doubts about the independence of the Federal Reserve have led to excellent performance for both asset classes," said Deutsche Bank analyst Laboure.

Bitcoin's market capitalization has reached $2.3 trillion this year, and Laboure believes that this cryptocurrency still has room for growth, expecting it to rebound to $120,000 by the end of the year. This cryptocurrency previously reached a historical high of $123,500 in August.

"Although gold has long been the most standard alternative asset, the milestone decision made by the Trump administration in March this year to establish a strategic Bitcoin reserve in the U.S. has reignited intense discussions about central banks holding Bitcoin as a reserve asset," Laboure added.

The Rise of Digital Gold Continues

Deutsche Bank also believes that the strong bullish trend of global governments, corporations, and institutional investors viewing Bitcoin as "digital gold" may continue, especially after the U.S. establishes a strategic Bitcoin reserve and solidifies the value storage status of this digital token.

"Similar to gold, Bitcoin's supply is fixed (with a cap of 21 million coins). This creates unique disinflationary benefits, meaning that Bitcoin's value is often not eroded over time by inflation like fiat currencies... Bitcoin is also independent of any government, and some believe this may make it more attractive as a diversification tool for monetary authorities," said Deutsche Bank analyst Laboure As the US dollar weakens, discussions within the United States about whether the central bank should expand its reserve portfolio are increasing. Deutsche Bank believes that Bitcoin can serve as a complementary store of value.

"Another key feature of Bitcoin is its portability and accessibility. Whether storing 0.001 Bitcoin or 10,000,000 Bitcoin, the cost is the same: almost zero. In contrast to gold, moving tons of gold out of an invaded country during times of conflict would be very difficult and costly; by comparison, Bitcoin reserves have more practical value," Laboure added.

Laboure also stated that in the medium term, the safe-haven properties of Bitcoin and gold will continue to exist, with gold maintaining its lead in official reserves, while Bitcoin will continue to expand in private and alternative asset reserves. The analyst also believes that Bitcoin's volatility will significantly decrease in the future, but neither Bitcoin nor gold can replace the US dollar as the primary reserve asset or the main global payment method in the short term.

Investors who are optimistic about Bitcoin's prospects generally believe that as the US dollar continues to decline, Bitcoin, which has both safe-haven properties and reserve value, will surge to $200,000 by the end of the year. Although the dollar index has occasionally rebounded after easing tensions in US-China trade relations, more and more Wall Street investment institutions indicate that this rebound is merely temporary, emphasizing that a "dollar bear market" that could last for years has just begun, triggered by the chaotic and disorderly "American Economic Reconstruction Act" of the Trump administration, which undermines the global trading system, as well as significant threats to the independence of the Federal Reserve's monetary policy.

Standard Chartered has repeatedly waved the flag for Bitcoin this year, accurately predicting an unprecedented bull market curve for Bitcoin in 2024. The institution forecasts that the price of Bitcoin (BTC-USD) will soar to $200,000 by the end of 2025 and predicts that Bitcoin will skyrocket to $500,000 before Trump officially leaves office in 2029.

The soaring "gold bull market" shows no signs of stopping, with the next target being $4,000?

Driven by expectations of further interest rate cuts by the Federal Reserve and a weakening dollar, spot gold prices climbed above $3,770 per ounce on Tuesday, reaching a historic high. The Federal Reserve announced a rate cut last week and indicated that further cuts may be forthcoming due to the continued weakness in the labor market. The market expects the Federal Reserve to cut rates nearly twice more in the remaining two monetary policy meetings this year, with each cut being 25 basis points. Meanwhile, newly appointed Federal Reserve Governor Stephen Milan stated on Monday that the current benchmark interest rate is too high, and without significant cuts, the US job market will face risks.

As the Federal Reserve restarted rate cuts in September, entering a new round of rate cut/easing cycle expectations, the upward pressure on real interest rates has eased, the dollar has weakened, reducing the opportunity cost of holding gold, and increasing the willingness of global investors and central banks to allocate gold.

Geopolitical friction, fiscal deficits, and concerns about central bank independence have continuously elevated safe-haven demand this year, leading several Wall Street financial giants to list a path to $4,000 by 2026 as a baseline or high-probability scenario Goldman Sachs, a major Wall Street firm, has a baseline expectation for gold prices at USD 3,700 by the end of 2025, with a forecast of USD 4,000 by mid-2026. Goldman emphasizes that if the private sector significantly increases its positions, an optimistic scenario could see prices rise to USD 4,500. Goldman also stated that if the U.S. economy slides into recession and the credibility of the Federal Reserve is severely damaged, investors may abandon traditional safe-haven investments like U.S. Treasury bonds, causing gold prices to surge to USD 5,000. In such a scenario, investors would trust hard assets like gold more than the U.S. dollar.

Another major Wall Street firm, JP Morgan, predicts that under the influence of the Federal Reserve's interest rate cut cycle and strong investor demand for safe havens, gold prices will reach an average of USD 3,800 per ounce in the fourth quarter of this year and break USD 4,000 per ounce in the first quarter of next year. Additionally, JP Morgan proposed an extreme scenario where concerns about the independence of the Federal Reserve intensify, leading to a small rotation of funds from the U.S. Treasury market to gold, which could see gold prices surpass USD 5,000 per ounce within "two quarters."