In the midst of an ongoing banking crisis, Bitcoin experienced a surge. BTC has recently surpassed $28,000, and the price surge is mostly fueled by investors and traders who hope the Federal Reserve will pause interest rate hikes or even lower rates.
Economist Robin Brooks shared his thoughts on the rise of Bitcoin on Twitter. Brooks dismissed the notion that the rise in Bitcoin price was due to any natural nature, noting that Bitcoin is rising because the Fed has become more dovish, which has removed all high beta assets. The IFF economist emphasized that there is nothing unique in Bitcoin trading, describing it as another bubble asset that fluctuates with the Fed’s decisions. In previous comments, Brooks discussed the volatile nature of Bitcoin and described it as a bubble asset that collapsed when the Federal Reserve got serious about raising interest rates.
“Bitcoin is rising – not due to any kind of special sauce the HODLER bros go on about – but because the Fed is more dovish, which lifts all high beta assets. There’s absolutely nothing unique in how Bitcoin trades. It’s just another bubble asset going up and down with the Fed…”
Brooks has cast doubt on the future prospects of the cryptocurrency, noting Bitcoin’s function, benefits, and lack of returns. Responding to criticism about his views, Brooks reiterated his stance in a later tweet. The economist explained that the recent increase in Bitcoin’s value was due to market expectations of a more dovish Fed stance, suggesting that Bitcoin remains another bubble asset subject to the whims of the Federal Reserve’s policies.