#Economists oppose the Fed investing in Bitcoin.#
Hot Topic Overview
Overview
Recently, old-school economists in the US 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, as these savings are not invested in real capital assets, while productivity improvements are crucial for improving living standards. He even called the idea of Bitcoin reserves "the dumbest idea ever." Despite this, 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 the feasibility of Bitcoin as a reserve asset and whether it is merely a distraction.
Ace Hot Topic Analysis
Analysis
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 promote productivity improvements, which are crucial for improving living standards. He even called the idea of Bitcoin reserves "the dumbest idea." This view 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. At the heart of this debate lies the question of 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, believe that Bitcoin's decentralized and censorship-resistant nature offers a new reserve option for the global economy. This debate reflects different perspectives on the future direction of digital currencies and raises questions about the relationship between traditional financial systems and digital currencies.