Robin Brooks is once again challenging Bitcoin’s credentials as a safe-haven asset. He has argued that its performance during the so-called “debasement trade” shows that it has failed to behave like digital gold.
The senior fellow at the Brookings Institution said Bitcoin “isn’t part of the debasement trade.” According to Brooks, Bitcoin has “consistently underperformed precious metals” during this period, undermining the argument that it serves as a reliable hedge against currency debasement.
“The lesson is that bitcoin is NOT a safe haven or store of value the way gold is,” Brooks wrote on X. He acknowledged that safe-haven status is ultimately a matter of perception, but argued that recent price action provides evidence supporting his view.
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Brooks has been a longtime critic of Bitcoin. In March 2023, he described BTC as a “bubble asset” that could collapse when the Federal Reserve became serious about raising interest rates, arguing that it offered “zero store of value function” and “zero diversification benefit.”
Later that year, Brooks called Bitcoin a “pointless asset,” arguing that its rallies were largely driven by changing expectations for Federal Reserve policy. He likened BTC to “just another futures contract on the Fed” and suggested investors would be better off trading Fed futures directly.
Still a safe haven?
Bitwise head of alpha strategies Jeff Park pushed back on the idea that Bitcoin’s behavior means it cannot benefit from the debasement trade.
Park argued that the key point is that Bitcoin has historically rallied during both “bull” and “bear” yield-curve steepening episodes. He cited several examples, including March 2020, February 2021, March 2023, September-October 2023 and September 2024.
Park was responding to Brooks’ latest analysis of gold, in which the economist said the precious metal had risen 10% over the previous 10 days.
Bitcoin’s sensitivity to different forms of yield-curve steepening means it can participate in both debasement and dedollarization trades.