#Economists oppose the Fed investing in Bitcoin.#
Hot Topic Overview
Overview
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 boost productivity and ultimately dragging down the economy. He even called the idea of Bitcoin reserves "the dumbest idea." This controversy stems from Senator Cynthia Lummis's proposed "Bitcoin Act," which aims to establish a Bitcoin strategic reserve by purchasing 1 million BTC. Although the bill has not yet passed, economists have engaged in heated debates about the risks and potential impacts of investing reserve funds in Bitcoin.
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, argues 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 dismissed the idea of Bitcoin reserves as "the dumbest idea." Hanke's views reflect the prevailing sentiment in traditional economics circles towards cryptocurrencies, which they believe lack intrinsic value, cannot serve as reserve assets, and could lead to economic risks. On the other hand, Senator Cynthia Lummis has 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 its impact on the economy. Some argue that Bitcoin's volatility is too high for it to be a reliable reserve asset, while others believe that its decentralized and anti-inflationary properties make it an attractive investment option. This debate will continue to influence the US government's policymaking on cryptocurrencies.