#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. He emphasized the importance of productivity improvements for better living standards and called the idea of Bitcoin reserves "the dumbest idea." 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 improve productivity and ultimately dragging down the economy. He 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. At the heart of this debate is whether Bitcoin can be a viable reserve asset. Opponents argue that Bitcoin lacks real value and cannot promote economic growth, while supporters believe that Bitcoin has advantages such as decentralization and inflation resistance, making it a viable new reserve asset. This debate will continue to spark reflection on the future direction of digital currencies.