In a recent tweet, economist Robin Brooks stirred up the crypto community with his remarks on Bitcoin, claiming that the digital asset is just another bubble asset that loses its value when the Federal Reserve decides to hike interest rates.
According to him, Bitcoin has no store of the value function, zero diversification benefit, and zero yields, making it useless in the face of a changing economic climate. He concluded his tweet with a farewell message to Bitcoin, saying, “Sayonara Bitcoin.”
Brooks’ comments sparked a heated discussion in the crypto community, with members expressing their views on the matter. Alex Gladstein, Chief Strategy Officer at HRF and an essayist at Bitcoin Magazine, was quick to respond to Brooks’ tweet, refuting his claims that BTC has zero stores of the value function.
Gladstein argued that BTC had been the best-performing asset of the last ten years, and there is no need to gaslight anyone.
However, another member named Paul Gehring disagreed with Gladstein’s statement, pointing out that the store of value and performance are two different things. Gehring suggested that the volatility and short history of Bitcoin make it hard to say that it has increased purchasing power.
Gladstein acknowledged Gehring’s point and added that Bitcoin had magnified the fruit, labor, and energy of its users more than any other asset over the past decade.
Derrick Hammer, another member of the crypto community, contributed to the discussion, saying that the same could have been said for gold before it hit mainstream acceptance.
Hammer argued that an asset needs critical mass before speculation stops being volatile, suggesting that Bitcoin’s current volatility is a sign of its growing pains.
However, the debate over BTC’s value persists within the crypto community. Some hail it as the decade’s top-performing asset, while others cite its volatility and brief history as challenges to determining its true worth. Whether Bitcoin endures or fades away like previous bubbles are yet to be seen.
Bitcoin Price Analysis
Bitcoin has experienced a significant increase in value, rising by 50% this year despite the collapse of major crypto-focused banks. This surge has surpassed major stock indexes and commodities. At the beginning of the year, BTC was trading slightly above $16,500, but as of Wednesday, it reached around $25,000 due to a rally last Sunday.
The recent upswing was somewhat unexpected, particularly following the closure of two of the largest lenders to the crypto industry, Silvergate Capital and Signature Bank. Nonetheless, industry insiders suggest that the expectation of a slower pace of interest rate hikes by the U.S. Federal Reserve is boosting BTC’s performance.
Related Reading | XRP Ledger Launches EVM Sidechain On Testnet