Pierre Rochard, CEO of The Bitcoin Bond Firm, has formally requested that the Federal Reserve embrace Bitcoin as an express variable in its 2026 supervisory stress assessments, arguing the asset’s excessive volatility and rising institutional adoption warrant standalone therapy in banking threat assessments.
The letter, submitted January 20 to the Federal Reserve Board, challenges the follow of grouping Bitcoin with different cryptocurrencies and proposes quantitative calibration primarily based on the asset’s historic habits relationship again to 2015.
Rochard’s submission arrives because the US authorities navigates conflicting insurance policies on Bitcoin holdings, amid current confusion over whether or not forfeited belongings from the Samourai Pockets case violated Government Order 14233, which requires seized Bitcoin to be transferred to the Strategic Bitcoin Reserve slightly than liquidated.
Nonetheless, the Division of Justice later confirmed, by means of White Home crypto advisor Patrick Witt, that the 57.5 BTC had “not been liquidated and won’t be liquidated,” resolving hypothesis after blockchain analysts flagged a November switch to a Coinbase Prime handle.
It’s in the US nationwide curiosity to turn into the Bitcoin Superpower.
To that finish, the Federal Reserve ought to start integrating bitcoin into its stress assessments and situations.
I've despatched in a remark letter explaining what I consider to be cheap path ahead. (1/3) pic.twitter.com/rDILZMpFv5
— Pierre Rochard (@BitcoinPierre) January 20, 2026
Excessive Volatility Calls for Separate Remedy
Rochard’s letter presents an in depth evaluation exhibiting Bitcoin’s 73.3% annualized realized volatility over the 2015-2026 pattern interval, in comparison with simply 18.1% for the S&P 500 over the identical timeframe.
The evaluation paperwork a most drawdown of 83.8% from peak to trough, with every day return tails starting from -10.0% on the 1st percentile to 10.7% on the 99th percentile, far exceeding typical asset habits.
“Bitcoin’s threat profile is unusually idiosyncratic and materially non-linear: it has skilled repeated, deep peak-to-trough drawdowns and sustained durations of very excessive realized volatility,” Rochard wrote.
He argued these properties have an effect on valuations, margin necessities, counterparty exposures, and liquidity calls for “in methods that can’t be reliably inferred from different situation variables.“
The submission contains rolling correlation evaluation demonstrating Bitcoin’s unstable dependence construction with macro-financial variables, with correlation between Bitcoin and S&P 500 returns starting from unfavorable to strongly optimistic throughout 90-observation home windows.
Rochard warned that “a set ‘beta’ mapping from equities (or threat sentiment) to bitcoin will understate threat in some regimes and overstate it in others,” making express situation variables important for constant stress testing throughout banks.
Implementation Would Scale back Mannequin Divergence
Rochard recommends that the Federal Reserve present quarterly Bitcoin value paths for baseline, adversarial, and severely adversarial situations, with elective every day paths for global-market-shock datasets.
He suggests three calibration strategies:
- Historic characteristic matching tied to peak-to-trough drawdowns and realized-volatility percentiles
- Regime-switching time-series fashions with completely different volatilities for bull and bear markets
- Bounce-diffusion frameworks with stochastic volatility explicitly representing tail threat
“The calibration aim is to not forecast bitcoin, however to provide a constant and extreme, however believable, path that stress assessments can translate into market and counterparty outcomes,” Rochard defined.
He emphasised that companies with out Bitcoin publicity may merely ignore the variable, whereas these with direct or oblique publicity would achieve “transparency, reproducibility, and constant situation translation” slightly than counting on inconsistent proxy assumptions.
The timing coincides with broader market stress, as Bitcoin plunged to $88,000 amid $1.07 billion in liquidations over 24 hours whereas gold surged previous $4,800 per ounce.
The divergence has renewed debate over Bitcoin’s position as both a threat asset or a strategic reserve, significantly after President Trump’s threats to impose tariffs on Greenland triggered a flight from US belongings.
CEO of Galaxy, Mike Novogratz, famous “the gold value is telling us we’re shedding reserve forex standing at an accelerating price,” including that Bitcoin “is disappointing as it’s nonetheless being met with promoting.”
The gold value is telling us we’re shedding reserve forex standing at an accelerating price. The lengthy bond promoting off shouldn’t be an excellent signal both. $BTC is disappointing as it’s nonetheless being met with promoting. I’ll reiterate it has to take out 100-103k to regain its upward…
— Mike Novogratz (@novogratz) January 20, 2026
The Federal Reserve’s remark interval for the 2026 stress take a look at situations closes February 21.
Senator Cynthia Lummis, who beforehand criticized potential authorities Bitcoin gross sales as squandering “strategic belongings whereas different nations are accumulating bitcoin,” has proposed laws to accumulate as much as 1 million Bitcoin over 5 years by means of budget-neutral strategies, together with tariff income and revalued gold reserves.
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