University

Analysis from Harvard College exhibits that Bitcoin (BTC) can assist central banks

Harvard graduate student Matthew Ferranti shows in his research that Bitcoin (BTC) can help different central banks overcome different problems.

In a recent research paper published by the renowned Harvard University, Ferranti argues that Bitcoin can be used by central banks as a hedging asset. According to the research report, Ferranti showed how central banks facing sanctions can use BTC to overcome their problems.

Central banks hold gold in their reserves to hedge against the risk of sanctions from other central banks. With this in mind, these central banks can use bitcoin alongside gold.

Many countries are likely to receive sanctions from developed countries like the United States. Because of this, many central banks are increasing their alternative reserves, including gold. However, acquiring gold is much more difficult than acquiring Bitcoin. Many cryptocurrency experts argue that bitcoin is better than gold, especially in terms of utility. Therefore, Ferranti believes these central banks could start hedging the risk by also using BTC as part of their reserves.

How would this help the cryptocurrency market?

Additionally, Ferranti believes this would be a win for both central banks and Bitcoin itself. If central banks diversify their reserves and bet more on Bitcoin, then the fundamental value of BTC would increase significantly. Additionally, many would see this as a major step towards the adoption of cryptocurrencies, which centralized institutions generally oppose.

also read How to use the DCA method in recurring cryptocurrency purchases

According to Bank of America (BofA) experts, investor sentiment towards Bitcoin has surged despite the recent economic turmoil the world is currently experiencing.

Additionally, given the recent events surrounding FTX, the crypto community is now more aware of the need for self-defense. Due to the dependency on the car custodian, BofA experts believe the pressure to sell BTC may ease. Therefore, this could make the case for Ferranti and his research at Harvard even stronger.

This article is offered to you in French in consultation with our partner crypto-academy.org
If you speak English, you can find the original article in English on Crypto Academy

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