Cointime

Download App
iOS & Android

Federal Reserve Bank of New York Identifies Bitcoin as a Savings Instrument Similar to Gold

A major development for Bitcoin occurred a few days ago, but it did not receive the proper coverage in the mainstream media.

The Federal Reserve Bank of New York, which is one of the 12 independent banks that make up the US Federal Reserve System (Fed), recently released a scientific study on the nature of Bitcoin and the conclusion it came to is surprising: it identifies Bitcoin as a kind of savings instrument, similar to gold.

“Monetary surprises”

This new report, number 1052, from the Federal Reserve Bank of New York entitled “The Bitcoin-Macro Disconnect” was released a few days ago and in which the federal agency tries to understand the nature of Bitcoin.

It is a serious academic paper that uses statistical analysis. In fact, because the report led to unexpected conclusions, it is published under the title “monetary surprises”.

“The key result is that, unlike other U.S. asset classes, Bitcoin is orthogonal to monetary and macroeconomic news. This decoupling is puzzling, as unexpected changes in discount rates should, in principle, affect the price of Bitcoin even when interpreting Bitcoin as a purely speculative asset.”

Simply put, the report states that based on rigorous statistical analysis, it has been found that — contrary to popular opinion — the Bitcoin price is mostly independent of both monetary and macroeconomic news. And even though Bitcoin reacts to news, it reacts significantly weaker than other assets.

Contrary to the populist view

This conclusion contradicts the populist view that Bitcoin is only a speculative asset. This unusual feature makes Bitcoin a defensive asset. Financiers typically classify assets as defensive if they behave contrary to some factor.

For example, Bitcoin’s price usually rises when dollar inflation increases, which makes BTC a defensive asset against the dollar.

Like Gold

Large players often hedge their reserve portfolios against devaluation. This means they use defensive assets to balance the value of the portfolio.

For example, if one part of the portfolio loses value, the other part becomes more expensive as a defensive asset for the first part and overall maintains the original value of the portfolio. Such a balanced portfolio composition is called “hedging”.

The “orthogonal properties” of Bitcoin, which the Fed writes about in its academic study, are ideal for hedging traditional financial assets. The Fed also recognizes Bitcoin as a savings vehicle (just like gold) for a variety of reasons.

Bitcoin as a hedge

This conclusion is fully supported by data from the US bank, BNY Mellon. Bank clients are already aware that Bitcoin can be used to hedge risks.

According to Reuters, Michael Demissie, head of advanced solutions at BNY Mellon Bank, said during the fintech and regulatory services conference, ‘Afore Consulting’, that cryptocurrencies are firmly entrenched in the financial sector, with clients eagerly using them in their portfolios.

“We see that clients are absolutely interested in digital assets,” he said.

Demissie added that more than 90 percent of this bank’s clients plan to invest in cryptocurrency assets in the near future.

Get the latest news here: Cointime channel — https://t.me/cointime_en

Comments

All Comments

Recommended for you

  • US Spot Ethereum ETF Sees Net Inflow of $14.98 Million Yesterday

    On October 22, according to monitoring by Trader T, the US spot Ethereum ETF recorded a net inflow of $14.98 million yesterday.

  • Sonic to Transfer 13 Million S Tokens via Strategic OTC Agreement in Next 24 to 48 Hours

    On October 22, Sonic announced on the X platform that approximately 13 million S tokens will be transferred in the next 24 to 48 hours under a strategic over-the-counter (OTC) agreement. The counterparty is a long-term partner of Sonic, and both parties will collaborate to expand Sonic's reach and enhance user engagement through the partner's network.

  • Bank of Korea Maintains Interest Rate as Expected

    On October 22, the Bank of Korea kept the policy interest rate unchanged at 3%, in line with market expectations. Previously, South Korea raised interest rates in consecutive meetings in July and August.

  • U.S. Treasury Secretary Becerra: GENIUS Act Establishes Federal Regulatory Framework for Stablecoin Payments

    U.S. Treasury Secretary Scott Becerra stated that the GENIUS Act is a milestone in the American financial sector, further solidifying the U.S. position as a global cryptocurrency hub. He compared the bill to the National Currency Act signed by President Lincoln in 1863, asserting that it establishes a federal regulatory framework for stablecoin payments in the digital age. Becerra also mentioned that the final rules issued by the Office of the Comptroller of the Currency (OCC) will facilitate the implementation of the bill, providing a clear and pragmatic institutional foundation for private sector innovation, market competition, and maintaining U.S. leadership in the digital asset space.

  • Kalshi to Support Crypto Asset-Backed Loans for Perpetual Futures Margin

    Prediction market platform Kalshi has reached a new arrangement with crypto asset custodian BitGo, allowing certain clients to use their custodial crypto assets as collateral for loans, which will be used for margin in leveraged perpetual futures trading on the Kalshi exchange. This arrangement is aimed at clients of Kalshi Prime, a futures commission merchant registered in the U.S. It employs a tri-party collateral management structure. Loans will be provided by its affiliated lending company, Kalshi Katalyst, with collateral assets held at BitGo Bank & Trust. Eligible collateral assets include Bitcoin, Ethereum, and stablecoins deemed compliant with the GENIUS Act, with plans to integrate additional custodians in the future.

  • Serious Security Vulnerability Discovered in PHP, Leading to Mass Shutdown of Government Websites in Europe

    On October 21, due to the discovery of serious security vulnerabilities in the widely used PHP programming language, multiple government websites across Europe and other regions were forced offline on Wednesday, prompting website operators to take urgent measures to protect system security. The PHP development team announced on Tuesday that two severe security flaws had been identified and urged users to update immediately after the release of the fix. On Wednesday, the PHP team confirmed that a new version addressing the vulnerabilities had been officially released. However, reports indicated that hackers were exploiting these vulnerabilities to breach websites, leading government agencies in countries such as the Netherlands and Finland to proactively shut down some sites before the patch was made available. PHP is one of the most widely used programming languages on the internet, supporting website platforms such as WordPress, Drupal, Joomla, and Magento. According to website technology statistics agency W3Techs, approximately 75% of websites that can identify their programming language use PHP. About 43% of websites globally are powered by WordPress, covering blogs, small business sites, government portals, e-commerce platforms, and news websites. This security incident has resulted in widespread disruptions to websites across multiple European countries, including the Port of Rotterdam, the government portal Overheid.nl, the Royal Netherlands Football Association, the websites of the country's five major political parties, and several hospital websites, all of which have been temporarily shut down.

  • US Stock Indices Open Slightly Higher; SpaceX Soars 8% After Earnings

    The three major US stock indices opened slightly higher, with the Dow Jones Industrial Average up 0.20%, the S&P 500 up 0.29%, and the Nasdaq Composite up 0.71%. SpaceX opened 8% higher, reporting third-quarter revenue of $14.6 billion, a year-on-year increase of 161%. Elon Musk stated that the annual recurring revenue (ARR) is expected to reach between $500 billion and $1 trillion by the end of 2027. Among other popular stocks, Nvidia rose 2.15%, Apple increased 0.09%, Google (Class A) fell 1.28%, Microsoft decreased 0.56%, Amazon was up 0.01%, TSMC rose 1.95%, SpaceX climbed 7.8%, Meta increased 0.24%, Broadcom rose 0.8%, Tesla was up 2.98%, SK Hynix increased 4.11%, Micron Technology rose 3.31%, AMD was up 2.25%, ASML increased 2.83%, Intel rose 2.01%, Cisco increased 0.67%, Oracle was up 1.55%, Dell Technologies (Class C) rose 7.81%, and ARM increased 2.78%.

  • ZEC Surpasses $1300

    Market data shows that ZEC has surpassed $1300, currently priced at $1315.68, with a 24-hour increase of 14.89%. Due to significant market fluctuations, please ensure proper risk management.

  • OpenAI to Launch on Google Cloud: Cutting-Edge Models like GPT-6 Astra and Codex Code Intelligence Available on Google Cloud

    On October 21, the two companies announced that in the coming weeks, OpenAI will offer its cutting-edge AI models and Codex code intelligence services through Google Cloud. This move deepens the collaboration between these two competitors and highlights how major cloud service providers are becoming important distribution channels for top AI models. According to a corporate blog announcement, this partnership will integrate OpenAI's latest models, including GPT-6 Astra, into Google Cloud's Model Garden. Customers will be able to purchase these models on the Google Cloud Marketplace and settle using their existing cloud service procurement credits. OpenAI aims to promote its models to a broader range of enterprise customers.

  • Zelensky: Willing to Reach Peace Agreement While Retaining Control of At Least 75% of Territory

    On October 21, Ukrainian President Zelensky stated in an interview that Ukraine could reach a peace agreement while retaining control of at least 75% of its territory. When asked by the host whether he would be willing to accept a peace agreement that would freeze the situation as it is, with Ukraine still holding 75% or more of its land, Zelensky responded affirmatively, stating, "Now we must freeze (the front lines), this is a practical way to end this war." (CCTV News)