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Bitcoin

Bitcoin’s Diversification Flaws Uncovered By Respected Economist

March 23, 2023 - Around 2 mins mins to read

Key Points:

  • Bitcoin has been making headlines recently for its wild fluctuations in value.
  • Federal Reserve’s latest policy meeting expressed caution about the recent crisis triggered by the collapse of some prominent banks but highlighted that the American banking system was robust.
Bitcoin has been making headlines recently for its wild fluctuations in value. In the latest development, Bitcoin’s value fell by almost 5% to $26,000 following the announcement of a quarter-percentage point interest rate increase by the U.S. Federal Reserve.
Bitcoins Diversification Flaws Uncovered By Respected Economist

This marked the ninth consecutive interest rate hike and the second quarter-point increase in a row, leading to widespread panic among cryptocurrency enthusiasts.

Economist Robin Brooks of the Institute of International Finance (IFF) tweeted that Bitcoin was demonstrating “genuine diversification attributes today – to the downside.”

Brooks joked that Bitcoin’s diversification attributes were “heads you lose, tails you lose. If you hold Bitcoin,” since the cryptocurrency fell when it was expected to rise. The comment ruffled the feathers of many cryptocurrency enthusiasts, who started attacking Brooks in the replies to his tweet. It is worth noting that Brooks had previously criticized Bitcoin on March 14, calling it “just another bubble asset” with “zero store of the value function,” “zero diversification benefit” and “zero yields.”

The Federal Reserve’s latest policy meeting expressed caution about the recent crisis triggered by the collapse of some prominent banks but highlighted that the American banking system was robust. While mostly in line with Wall Street’s expectations, the decision to continue hiking interest rates dashed crypto bulls’ hopes of a dovish U-turn amid the banking crisis.

Despite recent bouts of volatility, the price of Bitcoin had 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 Bitcoin’s true value or potential. He suggests that cryptocurrency is not a reliable investment, and its volatility has once again come to the fore following the Fed’s recent rate hike decision. It is clear that the cryptocurrency market is still in its early stages, and investors need to be cautious when investing in digital currencies.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Annie

Coincu News

# Cryptocurrencies

crypto

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Annie

Championing positive change through finance, I've dedicated over eight years to sustainability and environmental journalism. My passion lies in uncovering companies that make a real difference in the world and guiding investors towards them. My expertise lies in navigating the world of sustainable investing, analyzing ESG (Environmental, Social, and Governance) criteria, and exploring the exciting field of impact investing. "Invest in a better future," I often say. That's the driving force behind my work at Coincu – to empower readers with knowledge and insights to make investment decisions that create a positive impact.
Bitcoin

Bitcoin’s Diversification Flaws Uncovered By Respected Economist

Key Points:

  • Bitcoin has been making headlines recently for its wild fluctuations in value.
  • Federal Reserve’s latest policy meeting expressed caution about the recent crisis triggered by the collapse of some prominent banks but highlighted that the American banking system was robust.
Bitcoin has been making headlines recently for its wild fluctuations in value. In the latest development, Bitcoin’s value fell by almost 5% to $26,000 following the announcement of a quarter-percentage point interest rate increase by the U.S. Federal Reserve.
Bitcoins Diversification Flaws Uncovered By Respected Economist

This marked the ninth consecutive interest rate hike and the second quarter-point increase in a row, leading to widespread panic among cryptocurrency enthusiasts.

Economist Robin Brooks of the Institute of International Finance (IFF) tweeted that Bitcoin was demonstrating “genuine diversification attributes today – to the downside.”

Brooks joked that Bitcoin’s diversification attributes were “heads you lose, tails you lose. If you hold Bitcoin,” since the cryptocurrency fell when it was expected to rise. The comment ruffled the feathers of many cryptocurrency enthusiasts, who started attacking Brooks in the replies to his tweet. It is worth noting that Brooks had previously criticized Bitcoin on March 14, calling it “just another bubble asset” with “zero store of the value function,” “zero diversification benefit” and “zero yields.”

The Federal Reserve’s latest policy meeting expressed caution about the recent crisis triggered by the collapse of some prominent banks but highlighted that the American banking system was robust. While mostly in line with Wall Street’s expectations, the decision to continue hiking interest rates dashed crypto bulls’ hopes of a dovish U-turn amid the banking crisis.

Despite recent bouts of volatility, the price of Bitcoin had 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 Bitcoin’s true value or potential. He suggests that cryptocurrency is not a reliable investment, and its volatility has once again come to the fore following the Fed’s recent rate hike decision. It is clear that the cryptocurrency market is still in its early stages, and investors need to be cautious when investing in digital currencies.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Annie

Coincu News

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