Bitcoin has faced challenges in recent months as its price rally has come to a halt, even as traders prepare for a potential 2026 Wall Street surprise. Last month, the bitcoin price surged to over $124,000 per bitcoin; however, it has since retreated amid concerns of a looming “death spiral” unsettling both bitcoin and crypto traders. Currently, a staggering $9.5 trillion “wall of cash” is poised to intersect with bitcoin and the broader crypto market. Analysts, a major player on Wall Street, have forecasted that bitcoin may soon achieve parity with gold on the Federal Reserve’s balance sheet. Federal Reserve chair Jerome Powell’s term is set to conclude next year, paving the way for U.S. president Donald Trump to potentially appoint a pro-bitcoin successor.
“While gold has long been the standard alternative, the Trump Administration’s landmark decision to establish a U.S. strategic reserve this past March reignites the argument for central banks to hold bitcoin as a reserve asset,” Marion Laboure. “We conclude there is room for both gold and bitcoin to coexist on central bank balance sheets by 2030,” Laboure stated. This year has seen a remarkable surge in both bitcoin and gold prices, with gold’s market capitalization skyrocketing to an impressive $25 trillion, while bitcoin has reached a significant milestone of over $2.3 trillion. This week, gold reached a new all-time high, surpassing $3,700 as central banks globally persist in bolstering their reserves amid a weakening U.S. dollar and the disruptive trade policies of U.S. President Donald Trump that are reshaping the financial landscape. The bitcoin price and the broader crypto market surged after Donald Trump’s election victory in November. His significant announcement in March regarding the U.S. plans to establish a bitcoin strategic reserve and a crypto stockpile provided an additional lift to prices.
Trump’s executive order regarding the establishment of a bitcoin reserve lacked specific details; however, U.S. Treasury Secretary Scott Bessent affirmed last month that the Trump administration is dedicated to identifying budget-neutral methods for its creation. “Treasury is committed to exploring budget-neutral pathways to acquire more bitcoin to expand the reserve, and to execute on the president’s promise to make the United States the ‘bitcoin superpower of the world,’” Bessent posted to X, calling the “bitcoin that has been finally forfeited to the federal government … the foundation of the strategic bitcoin reserve that president Trump established in his March executive order.” This week, the bitcoin price has seen a decline as traders analyze the Federal Reserve’s September interest rate cut, with economic indicators pointing towards another potential rate reduction in October. “Following last week’s Fed funding cut, futures positions have been reset and liquidity has returned to the market,” Gadi Chait stated. “Ultimately, for long-term investors, these fluctuations are part of bitcoin’s normal rhythm.” The network stands out as the most secure, with adoption steadily increasing across both retail and institutional sectors. “Bitcoin is here to stay, and its next chapter is only beginning.”
Analysts noted that bitcoin has the potential to function similarly to gold as a store of value, exhibiting a low correlation with traditional assets, which makes it appealing to central banks, including the Federal Reserve. “Bitcoin also has the potential to provide both an investment and a consumer-good value. As such, like gold, bitcoin’s long-term performance may also be supported by income growth,” Laboure wrote. “This highlights the reason behind the increased correlation between equities and bitcoin during strong rallies.” In August, a research paper from the Fed detailed how the U.S. government could revalue its gold holdings, potentially boosting its book value to $750 billion, a significant increase from the current $11 billion. The note highlighted that five other nations have leveraged profits from their official gold reserves to generate funding. Earlier this month, a senior advisor to Russian President Vladimir Putin stated that the U.S., under President Donald Trump, aims to leverage cryptocurrency to “erase its massive debt at the world’s expense” and recalibrate the financial system to its advantage.
“The U.S. is now trying to rewrite the rules of the gold and cryptocurrency markets,” Anton Kobyakov, stated at the Eastern Economic Forum in remarks translated by Russia Direct. “Keep in mind the magnitude of their debt—$35 trillion. These two sectors (crypto and gold) are essentially alternatives to the traditional global currency system.” In the previous election campaign, Trump proposed the intriguing idea of utilizing bitcoin to address the staggering $35 trillion U.S. debt. He mentioned to Fox Business, “maybe we’ll pay off our $35 trillion, hand them a little crypto check, right?”