Robin Brooks, an economist at the Institute of International Finance (IFF), believes that Bitcoin is “just another bubble asset.”
in a tweet On March 14, Brooks stated that Bitcoin has no “store of value,” “divided yield,” and “yield,” and that it will “explode” when the Fed gets serious about raising rates.
Brooks’ tweet comes as bitcoin recently breached the $26,000 mark, marking a new year-to-date high and sending cryptocurrency speculators into a frenzy.
However, his comments suggest that Bitcoin’s recent bull run does not reflect its true value or potential.
Economist Tim Kehoe commented on Brooks’ tweet that Bitcoin is a bubble. Kehoe agrees with Brooks that low interest rates can spur investment in riskier assets, such as this “coin king.” That’s why he considers asset bubbles in an overlapping model of zero interest rates or equivalent growth.
Still, he wants to explore the link between low interest rates and investing in riskier assets by collecting more data.
The viability of Bitcoin as a standalone asset class has long been a topic of debate in the financial world.
Cryptocurrency advocates see bitcoin as a legitimate investment and store of value. However, many disagree with this view, arguing that BTC is just a speculative bubble that will soon burst.
As expected, Brooks’ recent comments angered many cryptocurrency enthusiasts, who were quick to dismiss his criticisms in the comments below the tweet.
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