Bitcoin price has enjoyed a spike in the midst of a continuing banking crisis. The price of the bellwether cryptocurrency just topped $28,000, with investors and traders hoping that the Federal Reserve will suspend interest rate hikes or possibly decrease rates. On the Coinbase exchange, the largest cryptocurrency currently trades at $27,743.
BTC/USD 4-hour chart | Source: TradingView
Economist Robin Brooks took to Twitter to discuss the Bitcoin boom. He denied that Bitcoin’s gain is due to inherent features, claiming it is growing because the Fed has grown more dovish, supporting other high-beta assets. The IFF economist underlined that Bitcoin trades similarly to other bubble assets that fluctuate in response to Fed decisions.
Bitcoin is rising – not due to any kind of special sauce the HODLER bros go on about – but because the Fed is more dovish, which lifts all high beta assets. There’s absolutely nothing unique in how Bitcoin trades. It’s just another bubble asset going up and down with the Fed… pic.twitter.com/aJ5OZqkQgu
— Robin Brooks (@RobinBrooksIIF) March 25, 2023
Brooks previously discussed the unpredictable nature of Bitcoin, describing it as a bubble asset that will collapse when the Federal Reserve gets serious about rising interest rates.
He questioned Bitcoin’s prospects by pointing out its lack of a store value function, diversification benefits, and dividend.
In response to criticism of his beliefs, Brooks maintained his position in a subsequent tweet. He noted that the current spike in Bitcoin’s value is due to market expectations of a more dovish Fed position. However, Bitcoin is still simply another bubble asset subject to the vagaries of the Federal Reserve’s policies.
Bitcoin price entering into a new bullish chapter?
According to closely respected analyst Dave the Wave, evidence indicates to Bitcoin is starting a new bullish chapter as key long-term indicators turn green.
The unnamed expert advises his 137,000 Twitter followers that if he were a “betting man,” he would pay attention to Bitcoin’s weekly moving average convergence divergence (MACD).
The MACD seeks to identify trend reversals by tracking the convergence or divergence of a group of moving averages. According to Dave the Wave, six times in BTC’s history, including right now, the MACD has turned positive just before extensive multi-week or multi-month rallies.
“The weekly BTC MACD. If I were a betting man….”, he stated.
Source: Dave the Wave/Twitter
In the long run, the famous expert believes pricing Bitcoin in gold rather than US dollars is another way to evaluate its price performance. He believes that in around 20 years, Bitcoin will have the same market valuation as gold, meaning a 22X price rise.
A 22x would give a BTC market cap of 12 trillion USD [in 2023 terms]. This is near equivalent to the current market cap of gold – 13 trillion.
Of course, in the 2040s it would be priced in a different currency [even if USD in name].
Best to just say 1 BTC could equal 400 ounces pic.twitter.com/Ss2ShC5zpa
— dave the wave🌊🌓 (@davthewave) March 24, 2023
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