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Institute of International Finance (IFF) economist Robin Brooks has derided BTC’s lack of diversification as the asset continues to face strong resistance at the $28,000 level.
After the U.S. Fed announced on March 22 that it would raise interest rates by a quarter of a percentage point, the value of bitcoin dropped, bringing it back down to the level of $27,000. This represented the ninth straight time that interest rates were increased, and the second consecutive rise of a quarter point.
Bitcoin is showing “real diversification features today – to the negative,” according to the tweet by Robin Brooks. He joked about bitcoin’s diversification characteristics: “heads you lose, tails you lose.”
Bitcoin is displaying some genuine diversification attributes today – to the downside. A dovish Fed sent 2-year Treasury yield down in anticipation of looser monetary policy. That should see Bitcoin rally, but instead it fell. Heads you lose. Tails you lose. If you hold Bitcoin. pic.twitter.com/ChirQslM0F
— Robin Brooks (@RobinBrooksIIF) March 22, 2023
The statement infuriated many people passionate about bitcoin, and they began bashing Brooks in the comments section of his tweet.
On March 14, he was quoted as having previously expressed his disapproval of bitcoin, referring to it as “simply another bubble asset” and claiming that the cryptocurrency has “zero store of value function…zero diversification advantage,” and “zero returns.”
The current market situation
The most recent meeting of the Fed’s policy committee emphasized the resilience of the U.S. banking sector while expressing concern about the current crisis caused by the failure of several well-known institutions.
Crypto bulls’ dream of a dovish u-turn in the middle of the financial crisis were dashed when the Fed decided to keep raising interest rates even though this move was mainly by Wall Street’s predictions.
The price of bitcoin has seen significant amounts of fluctuation on many occasions. Recent events have contributed to surpassing the $28,000 threshold, bringing it near a year-to-date high.