Is Bitcoin a speculative commodity? The Federal Reserve releases a Bitcoin report, stating that Bitcoin has no relation to currency and macroeconomic news!

The Federal Reserve Bank of New York in the United States has released a new Bitcoin research report titled "The Bitcoin–Macro Disconnect," which compares the trends of Bitcoin with other assets. The study has yielded a surprising result - unlike other asset classes, Bitcoin is completely unrelated (orthogonal) to currency and macroeconomic news!

Everyone knows the theory of investment that, without considering the intrinsic value of assets, the current price is entirely determined by the discounted value of expected future prices, which means interest rates are an absolute factor affecting prices. The report also considers Bitcoin as such a commodity, implying that, from a macroeconomic perspective, developments in current and future interest rates, whether directly or indirectly, will affect the value of Bitcoin.

In the study, the author identifies macroeconomic factors that are believed to influence commodity trends, such as FOMC meetings and various economic data including employment figures, CPI, PPI, and ISM indices. After comparing the price trends of Bitcoin and other assets such as the stock market, gold, and the euro following the release of this data, it was found that Bitcoin was completely detached from other asset classes.

This detachment is puzzling; even if Bitcoin is considered a purely speculative asset, in principle, unexpected changes in discount rates and interest rates should affect its price. However, in the empirical analysis of this report, the author found that Bitcoin does not react to monetary and macroeconomic news. Nevertheless, given the relatively short sample period used in the analysis, 2017 to 2022, more evidence may be needed to evaluate the detachment between Bitcoin and macroeconomic fundamentals.