Dollar Reserve Decline Does Not Necessarily Mean Growing Bitcoin Demand
Recent analysis from the New York Fed found that the dollar's reserve-share decline between 2015 and 2025 was not solely due to a decrease in sovereign demand for Bitcoin. The researchers pointed out that a shrinking dollar share can be caused by both currency choices and changing reserve sizes, which may indicate diversification but does not necessarily prove sovereign demand for Bitcoin.
The study, published on September 2, 2026, distinguished between the two factors using IMF COFER data. The results showed that countries with below-average dollar allocations can still accumulate reserves, pulling down the global average without cutting their own allocation. For example, Switzerland's reserve growth between 2015 and 2019 contributed to a decline in the worldwide dollar share even as its own dollar allocation rose.
The researchers also noted that diversification beyond liquidity needs does not necessarily identify the destination of investments. To prove sovereign demand for Bitcoin, evidence is needed of disclosed allocations, funding sources, executed purchases, and clear reserve classifications. A shrinking dollar share alone does not provide this information.