In the midst of an ongoing banking crisis, Bitcoin has experienced a surge. The bellwether cryptocurrency recently surpassed the $28,000 mark, with the price increase being mostly fueled by investors and traders who hope the Federal Reserve may pause interest rate hikes or even cut rates. Currently, the largest cryptocurrency is trading at $27,713 on the Bitstamp exchange.
Economist Robin Brooks took to Twitter to share his thoughts on the Bitcoin surge. He dismissed the idea that the cryptocurrency's rise is due to any inherent qualities, stating that Bitcoin is rising because the Fed has become more dovish, which lifts all high beta assets.
The IFF economist emphasized that there's nothing unique in how Bitcoin trades and called it just another bubble asset that fluctuates with the Fed's decisions.In earlier comments, Brooks had discussed the volatile nature of Bitcoin, characterizing it as a bubble asset that collapses when the Federal Reserve gets serious about hiking interest rates.
He pointed out Bitcoin's lack of store value function, diversification benefits, and yield, casting doubt on the cryptocurrency's future prospects.
Responding to criticism about his views, Brooks reiterated his position in a later tweet. He explained that the recent rise in Bitcoin's value is due to market expectations of a more dovish Fed stance, maintaining that Bitcoin remains just another bubble asset, subject to the whims of the Federal Reserve's policies.