#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 would hinder economic growth as these savings are not invested in real capital assets, leading to a decline in productivity and ultimately impacting living standards. He even dismissed the idea as "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 questions about Bitcoin's viability as a reserve asset, its feasibility, and whether it would be 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 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 be 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 makes it a viable new reserve asset, offering more options for the global economy. This debate will continue to spark discussions about digital currencies and ultimately determine Bitcoin's place in the global economy.