Amidst a current banking crisis, Bitcoin has skyrocketed. With most of its price increase being caused by traders and investors, recently the cryptographic money outperformed the $28,000 benchmark, valued at $27,713 on the Bitstamp platform. Economist Robin Brooks has communicated his view on the issue in a tweet, denying that the rise of Bitcoin is caused by any intrinsic attributes. He further suggested that it is the increased dovishness of the Federal Reserve which has lifted all the higher beta resources and no distinguishing quality of Bitcoin is accountable for the surge.
At the same time, Robin Brooks characterized Bitcoin as another bubble asset subjected to the changes and policies of the Federal Reserve. He reminded of the cryptocurrency's instability by talking about the fear of it collapsing in reaction to the Federal Reserve's intense hikes in the already existing interest rates. Along the same lines, he made clear the lack of abilities that Bitcoin holds to store values, diversify and generate yield, hence, compromising its long term prospective developments.
After different criticisms towards his opinion, he further assessed it. He specified that the recent rise in Bitcoin's worth is because of market forecasts about the increasingly dovish Federal Reserve. In the end, he proceeded to stress that Bitcoin continues to be a mere inflated resource, exclusively controllable via the plans and policies of the Federal Reserve.
Ethan Garcia
- 2023-03-26
Bitcoin Soars During Banking Crisis
Bitcoin has skyrocketed amidst a banking crisis, with traders and investors causing most of the price increase. Economist Robin Brooks argues that the surge is actually due to the increasingly dovish Federal Reserve and defines Bitcoin as a mere inflated resource.
