Dollar Weakens as Gold and Bitcoin Gain Ground in Global Reserves

Key Insights:

• The US dollar’s share of global reserves falls to 40%, marking its lowest level in over two decades.
• Gold climbs to 28% of reserves, overtaking euro, yen, and pound combined for the first time.
• ETFs, firms, and governments now control a meaningful share of Bitcoin’s fixed supply.
• BlackRock cites Bitcoin’s long-term behavior as closer to gold than equities.

Global financial markets are seeing a clear shift in how countries and institutions protect value. Long-standing reliance on the US dollar is fading as central banks increase exposure to gold and alternative assets like Bitcoin. Gold prices have surged as reserve strategies change, while interest in Bitcoin continues to rise among institutions and governments.

Gold Leads Reserve Assets as Dollar Share Drops to Two-Decade Low

The US dollar is slowly losing its position as the world’s most preferred reserve currency, making up about 40% of global foreign exchange reserves. As reported by The Kobeissi Letter, the currency’s share in the reserve ranking has dropped by roughly 18 percentage points. In fact, this drop marks the US dollar’s lowest level in the past 20 years.

While the dollar struggles, gold has gained ground, rising to 28% of global reserves after a 12-point increase. Interestingly, this performance marks the asset’s best standing since the early 1990s. Even more, it places gold ahead of the euro, yen, and pound combined in global reserve rankings.

Gold’s strong performance comes as central banks continue to pivot towards the asset as a key market strategy. And as expected, this shift has directly impacted the financial markets. Gold prices climbed 65% in 2025, marking the metal’s strongest annual gain since 1979. 

In contrast, the US Dollar Index fell 9.4%, its worst yearly performance in eight years. Price action reflects a growing search for assets viewed as less exposed to currency risk and political pressure.

Bitcoin Seen as Long-Term Store of Value Amid Inflation and Global Tensions

Interest in Bitcoin has risen alongside gold’s advance. Firms and sovereign entities increasingly view the asset as a long-term store of value, especially during periods of inflation and geopolitical strain. 

Tensions between the United States and other global powers have added to that appeal by channeling capital toward non-traditional assets.

Institutional and government ownership now represents a notable share of Bitcoin’s fixed supply. As per data from BiTBO, Exchange-traded funds alone hold close to 1.5 million BTC ($135 billion), roughly 7.1% of the total supply. 

Public companies control more than 1.0 million BTC, while private firms hold nearly 430,000 BTC. Government wallets collectively own over 518,000 BTC, showing that sovereign interest is no longer marginal.

Image Source: BiTBO

According to market observers, Bitcoin’s decentralized nature and lack of government control are key reasons behind this trend tilt. Built-in supply limits also set it apart from fiat currencies, which can expand during periods of stress.

BlackRock Says Bitcoin Shows Safe-Haven Traits Similar to Gold

BlackRock experts explained that Bitcoin shares several traits with traditional safe havens.  A senior executive at BlackRock explained that Bitcoin tends to act differently from stocks over time. He added that gold has displayed similar behavior to BTC across market cycles.

“There’s been periods where Bitcoin’s correlation with equities has spiked, and there’ve been periods where it’s gone negative. Actually, gold shows a lot of the same patterns where you have these temporary periods where it spikes, but long term, close to zero.” 

Robbie Mitchnick, the head of digital assets at BlackRock Inc., stated.

Exchange-traded funds have played a major role in shaping demand for the OG crypto. In 2025 alone, US-listed ETFs recorded inflows of more than $1.5 trillion. For comparison, this figure stood at $1.1 billion the prior year. 

Image Source: The Kobeissi Letter

The recent outing also marked the third straight year in which ETFs closed with gains of at least $200 billion. Investors added more capital in 2025 than in 2022 and 2023 combined, pushing total ETF assets under management to a record $13.4 trillion.

Large asset managers are still accumulating the asset. After a three-day buying spree, BlackRock added more than 9,600 BTC to its stash, bringing its total holdings to roughly 780,400 BTC ($70 billion). 

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