On Wednesday, following the announcement of the interest rate hike by the United States Federal Reserve, the value of Bitcoin took a hit. Reportedly, the value of the asset fell by almost 5% pushing it back to the $26,000 level.
The Federal Reserve announced a quarter-percentage point interest rate increase. The latest hike marks the ninth consecutive interest increase by the agency and the second-quarter point increase in a row.
To this, economist Robin Brooks from the Institute of International Finance (IIF), took to Twitter to share his opinion on the asset’s performance. IIF is an association or trade group for the global financial services industry.
Brooks mocked Bitcoin and said that the asset was displaying “genuine diversification attributes today – to the downside.” He joked that Bitcoin’s diversification attributes were that “heads you lose, tails you lose” implying that the asset has poor diversification. Brooks has a verified profile on Twitter and his tweet has received more than 340,000 views.
Additionally, the renowned economist pointed out that “If you hold Bitcoin,” since the cryptocurrency fell when it was expected to rise, which means a bad sign for investors. Amongst the thousand viewers, there are some who have criticized the economist and verbally attacked him in the replies to his tweet.
However, this is not the first time the economist has appeared to be anti-Bitcoin. Prior to this, on March 14, he called Bitcoin “just another bubble asset” and stated that it had “zero stores of the value function,” “zero diversification benefit” and “zero yields.”
Sources reveal that the Federal Reserve’s latest policy meeting was in response to the recent market crisis triggered by the collapse of some prominent banks like Silicon Valley Bank, Signature and Silveragate. However, the meeting highlighted that the American banking system was robust to get through such a crisis.
While being mostly aligned with the expectations of Wall Street, the decision to continue hiking interest rates led to crypto bulls’ hopes of a dovish U-turn in the midst of the banking crisis. Recently, the price of Bitcoin has seen numerous bouts of volatility.
Fueled by the financial turmoil, it recently crossed the $28,000 mark to reach a year-to-date high. However, Brooks’ comments suggest that the recent price spike is not reflective of its true value or potential. He concludes that cryptocurrency is not a reliable investment, and its volatility has once again followed the Fed’s recent rate hike decision.