#Economists oppose the Fed investing in Bitcoin.#
Hot Topic Overview
Overview
Recently, old-school economists in the United States have strongly opposed the proposal to allocate US reserve funds to Bitcoin. Steve Hanke, a professor at Johns Hopkins University, believes that shifting funds to Bitcoin could hinder economic growth because these savings are not invested in real capital assets, and improving productivity is crucial for improving living standards. He even called the idea of Bitcoin reserves "the dumbest idea." Nevertheless, Senator Cynthia Lummis still proposed the Bitcoin Act to establish a Bitcoin strategic reserve, aiming to purchase 1 million BTC. This debate has sparked discussions about whether Bitcoin is a viable reserve asset and whether it is a distraction.
Ace Hot Topic Analysis
Analysis
Recently, old-school economists in the United States have strongly opposed the proposal to allocate US reserve funds to Bitcoin. Steve Hanke, a professor at Johns Hopkins University, believes that shifting funds to Bitcoin could hinder economic growth because these savings are not invested in real capital assets, while productivity improvements are crucial for improving living standards. He even called the idea of a Bitcoin reserve "the dumbest idea." This view stands in stark contrast to the "Bitcoin Act" proposed by Senator Cynthia Lummis, which aims to establish a Bitcoin strategic reserve and purchase 1 million BTC. At the heart of this debate is whether Bitcoin can become a viable reserve asset. Opponents argue that Bitcoin lacks intrinsic value and its price volatility is too high to serve as a stable reserve asset. Supporters, on the other hand, argue that Bitcoin's decentralized and censorship-resistant nature can provide a new financial infrastructure for the global economy. Currently, this debate is ongoing, and the final outcome remains to be seen.