Bitcoin Advocate Urges Federal Reserve to Add BTC to Stress Tests
Pierre Rochard, CEO of The Bitcoin Bond Company, has formally requested that the Federal Reserve embrace Bitcoin as an express variable in its 2026 supervisory stress exams, arguing the asset’s excessive volatility and rising institutional adoption warrant standalone therapy in banking danger assessments.
The letter, submitted January 20 to the Federal Reserve Board, challenges the observe 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 recent confusion over whether forfeited assets from the Samourai Wallet case violated Executive Order 14233, which requires seized Bitcoin to be transferred to the Strategic Bitcoin Reserve quite than liquidated.
However, the Department of Justice later confirmed, by White House 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 deal with.
It is within the United States nationwide curiosity to develop into the Bitcoin Superpower.
To that finish, the Federal Reserve ought to start integrating bitcoin into its stress exams 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
Extreme Volatility Demands Separate Treatment
Rochard’s letter presents an in depth evaluation exhibiting Bitcoin’s 73.3% annualized realized volatility over the 2015-2026 pattern interval, in contrast to 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 danger profile is unusually idiosyncratic and materially non-linear: it has skilled repeated, deep peak-to-trough drawdowns and sustained intervals of very high 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 state of affairs 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 damaging to strongly constructive throughout 90-observation home windows.
Rochard warned that “a set ‘beta’ mapping from equities (or danger sentiment) to bitcoin will understate danger in some regimes and overstate it in others,” making express state of affairs variables important for constant stress testing throughout banks.
Implementation Would Reduce Model Divergence
Rochard recommends that the Federal Reserve present quarterly Bitcoin value paths for baseline, opposed, and severely opposed situations, with non-obligatory every day paths for global-market-shock datasets.
He suggests three calibration strategies:
- Historical characteristic matching tied to peak-to-trough drawdowns and realized-volatility percentiles
- Regime-switching time-series fashions with totally different volatilities for bull and bear markets
- Jump-diffusion frameworks with stochastic volatility explicitly representing tail danger
“The calibration objective just isn’t to forecast bitcoin, however to provide a constant and extreme, however believable, path that stress exams can translate into market and counterparty outcomes,” Rochard defined.
He emphasised that corporations with out Bitcoin publicity might merely ignore the variable, whereas these with direct or oblique publicity would acquire “transparency, reproducibility, and constant state of affairs translation” quite 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 past $4,800 per ounce.
The divergence has renewed debate over Bitcoin’s function as both a danger 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, noted “the gold value is telling us we’re dropping reserve foreign money standing at an accelerating fee,” including that Bitcoin “is disappointing as it’s nonetheless being met with promoting.”
The Federal Reserve’s remark interval for the 2026 stress check 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 purchase up to 1 million Bitcoin over 5 years by budget-neutral strategies, together with tariff income and revalued gold reserves.
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