Central banks are rethinking how they manage international reserves as financial sanctions become a growing threat. Between 2016 and 2021, countries more exposed to US sanctions increased their gold holdings faster than those with lower risk. Gold is attractive because it remains beyond the direct control of foreign governments. The study also tests whether Bitcoin can play a similar role. Using a Bayesian model to simulate returns, the analysis shows that higher sanctions risk makes central banks allocate more to gold, renminbi bonds, and Bitcoin. While Treasuries lose appeal under sanctions, Bitcoin and gold gain strategic value despite their volatility. The conclusion is clear: the risk of sanctions may drive long-term diversification of central bank reserves, supporting demand for both cryptocurrency and gold. This shift could reduce the dominance of traditional fiat assets and strengthen Bitcoin’s role in the global financial system. The study also tests whether Bitcoin can play a similar role. Using a Bayesian model to simulate returns, the analysis shows that higher sanctions risk makes central banks allocate more to gold, renminbi bonds, and Bitcoin. While Treasuries lose appeal under sanctions, Bitcoin and gold gain strategic value despite their volatility. The conclusion is clear: the risk of sanctions may drive long-term diversification of central bank reserves, supporting demand for both cryptocurrency and gold. This shift could reduce the dominance of traditional fiat assets and strengthen Bitcoin’s role in the global financial system. The conclusion is clear: the risk of sanctions may drive long-term diversification of central bank reserves, supporting demand for both cryptocurrency and gold. This shift could reduce the dominance of traditional fiat assets and strengthen Bitcoin’s role in the global financial system.