BNY Mellon Examines Bitcoin/Gold Relationship

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  • BNY Mellon has released a report looking at how to value Bitcoin
  • The report states that Bitcoin has moved through several phases and is now seen as a “financial asset”
  • BNY Mellon announced last month that it is to launch a crypto custody solution soon

BNY Mellon has released a report that has highlighted shifts in sentiment toward Bitcoin since the cryptocurrency’s creation and has suggested that it is on the way to matching silver and gold in terms of sentiment. In Blending Art & Science: Bitcoin Valuations, the BNY Mellon researchers attempted to “consider the value of alternative currencies such as Bitcoin” by looking at factors such as the mining process and its changing narrative over time, noting how it is now being compared to the function of precious metals.

Fiat Currencies “Being Questioned”

The BNY Mellon report begins by noting that “the intrinsic value of fiat currencies is increasingly being questioned” and that they “believe there is demand for Bitcoin/crypto currency” as a result of rampant money printing following the coronavirus crisis. The bank highlights the comparisons recently made with gold as a store of value, noting that “Bitcoin aligns nicely with gold in terms of both supply and demand.”

The report looks at the inherent cost of mining bitcoin which gives it an intrinsic value, although it is clear to state that this does not help “set” the Bitcoin price, considering the scarcity to be a much more valuable factor in Bitcoin’s appeal. BNY Mellon also notes that Bitcoin has passed a number of “financial milestones and phases” and currently exists as a financial asset and is on its way to being seen in the same light as silver:

BNY Mellon Launching Crypto Custody

BNY Mellon has good reason to want to investigate Bitcoin on a more intrinsic level – last month it announced that following a “surge in interest and demand from clients” it would start offering cryptocurrency custody solutions crypto assets for its asset management clients.