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Despite Bitcoin shattering previous records, economist Robin Brooks isn't convinced. He describes the cryptocurrency as "just another bubble" inflated by Federal Reserve rate cuts, casting doubt on its legitimacy amid the market rally.
Economist Stands Firm on Bitcoin as 'Just Another Bubble'
The former head economist of the Institute of International Finance, Robin Brooks, maintains her stance that Bitcoin is "just another bubble asset" despite the significant increases that the flagship cryptocurrency has enjoyed.
The economic expert has played down the recent upswing, saying it was just the Federal Reserve's interest rate decrease in action.
Brooks' Bold Claims Stir Bitcoin Community
By asserting that the dominant cryptocurrency had no diversification benefits and zero income in March of last year, Brooks infuriated Bitcoin fans. Additionally, he claimed Bitcoin was not a good way to store wealth.
Supporters of Bitcoin, who found his social media post from 2023, unleashed a fresh wave of "I-told-you-soing" after Bitcoin almost reached a new record high.
A Continued Defense Amid Bitcoin's Surge
Nonetheless, Brooks maintains his position, making it clear that his initial statement did not serve as a prediction regarding the direction of the cryptocurrency's price.
In 2022, when the Federal Reserve began aggressively raising interest rates to curb inflation that was getting out of hand, Bitcoin took a nosedive.
ETF Boom and Fed Rate Cuts Drive Bitcoin's Rise
Due to the ETF boom, Bitcoin climbed to a new recorded high in early 2024, U.Today points out. The Federal Reserve dropped interest rates for the first time since 2020 in September, which contributed to a price increase for risky assets like Bitcoin.
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