The Bank of New York is one of the oldest in the world and the oldest U.S. bank.

Founding fathers Alexander Hamilton and Aaron Burr were among the group that established the bank in 1784.

Five years later, Hamilton – then the Secretary of the Treasury – orchestrated a loan from the Bank of New York to the United States government… The nation’s first loan.

(If you didn’t know, Hamilton is the face of the $10 bill.)

This money paid the salaries of Congress and the nation’s first president, George Washington.

In 1792, the bank became the first company to trade on the New York Stock Exchange.

Since then, the Bank of New York has become a giant in the financial world and a major powerbroker on Wall Street.

It even increased its reach in 2007 when it merged with Mellon Financial – one of the world’s largest asset managers – to become BNY Mellon.

Today, BNY Mellon is the largest custodian bank in the world. It has $43 trillion in assets under custody… and $1.9 trillion under management across 35 countries.

Here’s why I’m giving you this brief history lesson…

Last week, BNY Mellon announced it had begun storing clients’ crypto assets…

This comes amid the brutal Crypto Winter, in which the overall crypto market is down 68% from its all-time highs.

That begs the question: Why did BNY Mellon hitch its horse to bitcoin in a bear market?

BNY Mellon doesn’t need the cash… It makes billions of dollars managing money.

Instead, it sees the growth in crypto… It sees the value… It sees the future.

BNY Mellon has sat on the sidelines for years while tiny offshore firms have made billions of dollars providing crypto trading and custody services.

You don’t think they want a piece of that? I promise you, they do.

Crypto is the asset of the future. And BNY Mellon has lasted as long as it has by recognizing and positioning itself into high-growth opportunities.

This begs the next question: Why hasn’t bitcoin rallied on the news?

Bitcoin’s Temporary Headwinds

Right now, the Federal Reserve is creating a headwind for all risk assets… and that includes crypto.

As the Federal Reserve raises interest rates to combat inflation, it sucks money out of risk assets and pumps it into less risky ones.

As I’ve written before, it all has to do with the risk-free rate of return.

Institutions view bitcoin as a high-risk trading asset. Nothing more. Nothing less.

They don’t care about bitcoin’s immutability, its 21 million bitcoin hard cap, or its decentralized design.

They see periods of high volatility and no actual earnings… so they trade it like a tech stock. In finance, we call these types of investments “risk-on” assets.

Every institution has rules that govern how and when they’ll allocate to them… and they use financial models that change the allocation based on the prevailing interest rates.

The 10-year U.S. Treasury rate – the “risk-free” rate – is typically what they choose…

If that rate of return is higher, they’ll move away from what they see as high-risk investments… Things like bitcoin and high-growth tech stocks.

And they’ll move into safe blue-chips with earnings, predictable cash flows, dividends, and inflation protection.

That’s what’s happening right now.

So for now, crypto assets are essentially trading in lockstep with Fed policy. I don’t know how long that will last.

But I do know this. The Fed can’t keep rates high forever.

Here’s why…

Let’s be conservative and say the Fed won’t stop raising rates until they hit 5%.

A 5% Fed Funds rate would be the highest since 2007… And there’s no question in my mind that rates that high will dramatically slow the U.S. economy.

It will also be difficult to go much higher than 5% because of federal debt.

Currently, U.S. federal debt stands at $30.5 trillion… That’s 121% of GDP.

The interest payment on that debt is $63 billion per month. At 5%, interest payments would balloon to $127 billion per month, extending the federal deficit by 27%.

So there’s only so much room the Fed has to maneuver before it blows a hole in the federal budget and sinks the entire U.S. economy.

That’s why the Fed will eventually cut interest rates. And as rates drop, you’ll see all risk assets start running and gunning.

The Market Yawned at This Bullish News

During bear markets like we’re experiencing now, I review my bitcoin adoption thesis. If it remains intact, then my conviction remains strong.

Over the years, I’ve told you we’d see bitcoin (and crypto) go from a few hundred thousand users to billions.

That story is only getting stronger.

In addition to the BNY Mellon news, last week Google and Coinbase announced a deal that will allow Google to accept crypto for some of its clients.

The deal will allow Google to go after cutting-edge Web3 companies that want to use crypto as their payment method.

Google is the third-largest U.S. company with an $1.3 trillion market cap. It has over 1 billion users worldwide.

This is a huge deal.

And these two stories come on the heels of BlackRock’s big announcement that it’s entering the crypto space.

BlackRock is the world’s largest asset manager, with $10 trillion under management.

The firm says its institutional clients want crypto access so badly that it’s also teamed up with Coinbase to provide them an access point… and these are institutional clients that collectively manage $40 trillion.

Yet the market greeted this bullish news with a collective yawn. Bitcoin is still trading between $18,000 and $20,000. Last year this time, it was trading near $70,000.

Friends, I know it’s frustrating.

I remember the dark days of the 2018 Crypto Winter. We got great news after great news… and bitcoin just languished for months.

Then one day, it seemed everybody suddenly woke up and said, “We’ve got to own bitcoin!”

We saw bitcoin rally from $4,000 to $8,000… then drop from $8,000 to $4,000… then take off to $10,000, $14,000, $16,000, $20,000.

The next thing we knew, it hit $70,000.

Why does it happen like that? I don’t have an answer.

But I know this: When the Fed stops raising rates, which it must at some point or risk bankrupting the federal government… risk assets will rally.

And if you’re waiting for the pivot… you better have a fast trigger finger. Because when crypto runs, it runs a lot further and faster than traditional assets.

The last time crypto ran, it hit a $3 trillion market cap… During the next bull run, it’ll be worth tens of trillions of dollars.

It won’t happen overnight… but it will happen.

You just need to let time do the heavy lifting.

Let the Game Come to You

Big T