Bitcoin’s Singular Case as a Global Reserve Asset
- James McKay
- Sep 30
- 7 min read
Updated: Oct 2
The global monetary system has only undergone a handful of truly defining shifts in the modern era, and each has left a lasting imprint on the way economies, markets, and governments interact. The breakdown of Bretton Woods in the early 1970s was one such shift: by cutting the dollar’s tie to gold and moving the world into floating exchange rates, it reshaped patterns of trade, rewired the plumbing of global finance, and set the stage for the high-volatility era that followed.
Half a century later, the debate no longer centres on the dollar versus gold or the euro versus the yen, but on whether digital assets can form the backbone of the next monetary order.
But what makes the present moment so extraordinary is that we have three contenders emerging simultaneously. Bitcoin has grown from a fringe experiment into one of the largest and most liquid assets on the planet, private issuers have scaled stablecoins into multi-billion-dollar markets, and Central banks are piloting digital currencies (CBDCs) to retain sovereign control over money.
This competition has profound implications, not only for efficiency and innovation, but for issues of privacy, control, inclusion, monetary and fiscal policy, and sovereignty. In this article, we examine why Bitcoin's qualities, specifically its monetary design, put it in pole position as the top candidate for global reserve status in the decades ahead.
Bitcoin as the Foundation of Digital Money
Every discussion of digital assets eventually circles back to Bitcoin, not simply because it was the first to emerge, but because it provided the technological breakthrough that made the rest of the ecosystem possible. Public key cryptography, distributed consensus, and immutable transaction records were not abstract concepts when Satoshi Nakamoto published the white paper in 2008, but Bitcoin was the first system to combine them into a functioning, secure monetary network.
Figure 1: A chain of transactions for the transfer of bitcoins
What followed was an entire generation of digital money experiments that borrowed heavily from those foundations. Stablecoins may today circulate on Ethereum, Tron, or Solana, but the underlying assurance of digital scarcity was proven by Bitcoin. Even the design of central bank digital currencies borrows from the ledger-based architecture that Bitcoin pioneered, albeit under a sovereign wrapper. In this sense, we can see Bitcoin as the basis on which every other digital monetary experiment rests.
That status matters when we talk about reserves. Gold’s role in the monetary system was never about its convenience in day-to-day transactions, it was about its neutrality, scarcity, and independence from political interference. Bitcoin shares those qualities in the digital era, and its existence as the original, unaltered design has given it a level of resilience and credibility that later entrants cannot match.
Evolution Beyond “Failure as Money”
For much of its early history, Bitcoin was judged against the standard set out in its white paper: a peer-to-peer electronic cash system. By that measure, critics have long argued that it has fallen short, with transaction throughput remaining far below that of established payment networks (despite L2 deployment), and volatility is still too high to make it practical as a unit of account.
These shortcomings are real, yet they also obscure the way Bitcoin’s role has evolved.
Figure 2: Relative TPS of Bitcoin, Paypal, Mastercard, and Visa.
Rather than being shunned over its failure to rival Visa or Mastercard in settlement speed or fiat currency price stability, its adoption has progressed because it offers qualities that global investors increasingly value: scarcity, neutrality, and resilience. Over time, its narrative has shifted away from daily payments and toward a function more analogous to gold.
Of course, this repositioning has not occurred in isolation but developed alongside growing recognition that the architecture of the existing monetary system is under strain, from sovereign debt crises to questions over the long-term credibility of fiat currencies.
The irony is that by “failing” in its narrowest use case, Bitcoin opened the door to a broader one. Investors stopped asking whether it could buy a coffee and started asking whether it could preserve wealth across decades – a shift which made subsequent comparisons to gold inevitable.
The Catalysts Behind Institutional Recognition
What ultimately carried Bitcoin from the fringes into institutional portfolios was not a single breakthrough but a convergence of factors. As mentioned, 'digital gold' gave investors a framework they could grasp immediately, and that narrative deepened at a time sovereign debt levels were rising, making the search for non-correlated hedges more urgent.
However, the evolution of a clear regulatory framework has arguably been the top catalyst, particularly in the US and other major economies. Spot ETFs have provided legal clarity and investor protection, which is essential for institutions, and this growing acceptance has bolstered confidence and removed a major barrier to mainstream adoption.
Figure 3: Key regulatory developments have been a major catalyst for institutional Bitcoin adoption
Furthermore, new accounting rules now permit corporations to report holdings at fair value, and the repeal of SAB 121 has enabled banks to offer broad crypto custody without punitive requirements. These regulatory and reporting milestones fundamentally lowered the perception of risk for Bitcoin. From this foundation, the capital flows became self-reinforcing: corporate treasuries acquired Bitcoin, asset managers created products that drew in billions, and futures and options markets rapidly matured. This chain of developments built successive layers of confidence, establishing an institutional momentum that speculative assets seldom attain.
The Global Turn: From Skepticism to Acceptance
For more than a decade, the dominant stance of supranational institutions was to dismiss Bitcoin as a distraction from the serious work of monetary policy. Reports from the IMF, BIS, and World Bank highlighted its volatility, energy use, and structural limits, while carefully avoiding any suggestion that it might deserve a seat at the table. Yet, over the past few years, the tone has shifted in a way that reveals a deeper recognition of its staying power.
The IMF’s decision in 2025 to classify Bitcoin (and other crypto assets) as “non-produced nonfinancial assets” for inclusion in macroeconomic and balance of payments statistics, placing it in the same category as land or natural resources, marked a turning point. The BIS and the World Bank are moving with caution, yet their actions confirm Bitcoin's lasting impact. The BIS now includes Bitcoin in financial stability discussions, and the World Bank has started experimenting with tokenized instruments based on Bitcoin's foundational design. Taken together, these reluctant steps prove that multilateral economic agencies can no longer disregard the asset.
Figure 4: Despite past caution, supra-national bodies now acknowledge Bitcoin's role in the evolving global financial landscape alongside CBDCs
While we have already seen the example of El Salvador’s adoption of Bitcoin as legal tender as a test case, corporate treasuries, ETFs, and derivatives markets have already made it part of the global financial system in practice. The debate has moved on: governments no longer ask whether Bitcoin matters, but how to accommodate it within existing frameworks for reserves, regulation, and monetary sovereignty.
Why Other Cryptos Don’t Qualify
When the discussion shifts to whether digital assets might play a reserve role, it is important to separate functional utility from structural design. Stablecoins, for instance, have proven their value in payments and settlement, with volumes that in many cases surpass those of established remittance networks. Yet their reliance on fiat collateral and private issuers ties them back to the very system they are supposed to supplement. They are effective instruments of liquidity, but they cannot stand as reserves in their own right.
The broader universe of cryptocurrencies brings innovation in programmability, governance, and niche applications, yet those features come at the cost of monetary credibility. Their supply schedules can change, their governance often rests with identifiable teams, and their economic security is untested at scale.
CBDCs are different in intent but limited in their neutrality. A CBDC is, by design, an extension of state monetary power. It can improve efficiency, broaden access, and streamline policy transmission, but it also inherits the political and surveillance risks of the system it represents. Reserve assets require independence from these pressures, which CBDCs cannot offer.
Figure 5: Survey data reveals a deep scepticism of CBDCs
Indeed, public polling in both the US and Europe shows a clear trust gap. In the US, surveys by the Cato Institute have found that 68% of Americans oppose a digital dollar, with the number rising above 80% among Republicans. In Germany, a similar 2023 poll showed that three-quarters of respondents worried a digital euro would give the government too much control over their spending data.
Bitcoin is distinguished precisely because it avoids these weaknesses: its supply is fixed, its protocol is neutral, and its network is secured by the largest pool of computing power ever assembled. Other assets may thrive as applications or complements, but none meet the threshold of scarcity, neutrality, and resilience that reserve status demands.
Figure 6: Bitcoin's inflation rate is mathematically engineered toward zero
The Architecture of the Next Monetary Era
History has shown that monetary systems rarely change overnight, and when they do, the outcome is less a replacement than a layering of new structures on top of the old. While CBDCs may extend sovereign control into the digital age and stablecoins provide flexible rails for payments, we maintain the view that Bitcoin is best suited to serve as an anchoring system as a neutral reserve-like asset due to its enforced scarcity backed by the largest computer network in the world.
The question for policymakers is not whether Bitcoin has a role to play, but how that role will be defined in practice. It already sits alongside gold and foreign exchange in corporate treasuries, is embedded in ETF markets, and is recognised within global economic statistics. What remains is the work of integration, shaping regulatory, monetary, and institutional frameworks around an asset that is no longer outside the system, but firmly inside it.
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Disclaimer: The information contained within is for educational and informational purposes ONLY. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision. No commercial relationships or partnerships exist with any of the technology providers, manufacturers, or suppliers herein.
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