#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 because these savings are not invested in real capital assets, thus failing to improve productivity and living standards. He even called the idea of Bitcoin reserves "the stupidest idea." This controversy stems from the "Bitcoin Act" proposed by US Senator Cynthia Lummis, which aims to establish a Bitcoin strategic reserve and purchase 1 million BTC. Currently, this debate continues, with controversy surrounding whether Bitcoin can be a viable reserve asset and whether it would be 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, thus failing to improve productivity and ultimately dragging down economic development. He even called the idea of Bitcoin reserves "the stupidest idea." This view stands in stark contrast to Senator Cynthia Lummis's proposed "Bitcoin Act," which aims to establish a Bitcoin strategic reserve and purchase 1 million BTC. The heart of this debate lies in whether Bitcoin can become a viable reserve asset. Supporters argue that Bitcoin has advantages such as decentralization and inflation resistance, making it a potential new reserve asset. Opponents, however, argue that Bitcoin lacks intrinsic value, its price volatility is too high to be a stable reserve asset, and it could have negative impacts on the economy. Currently, this debate continues, and the final outcome remains to be seen.