#Economists oppose the Fed investing in Bitcoin.#

Recently, old-school American economists 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, thus failing to improve productivity and subsequently impacting living standards. He even called the idea of Bitcoin reserves "the dumbest idea." This viewpoint stands in stark contrast to Senator Cynthia Lummis's proposed "Bitcoin Act," which aims to establish a Bitcoin strategic reserve by purchasing 1 million BTC. The heart of this debate lies in whether Bitcoin can become a viable reserve asset and whether it would be a distraction. Proponents argue that Bitcoin can serve as a new reserve asset, offering advantages like inflation resistance and decentralization. Opponents, however, contend that Bitcoin lacks intrinsic value, is excessively volatile, and cannot be a stable reserve asset. They also argue that it would divert investment from real capital assets, ultimately harming economic growth. This debate reflects differing perspectives on the future direction of digital currencies and sparks reflection on the relationship between traditional financial systems and emerging technologies.