#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. Johns Hopkins University professor Steve Hanke believes that shifting funds to Bitcoin could hinder economic growth, as these savings are not invested in real capital assets. He emphasizes the importance of productivity improvements for improving living standards and calls the idea of a Bitcoin reserve "the dumbest idea." Despite this, 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 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, while productivity improvements are crucial for improving living standards. He dismissed the idea of Bitcoin reserves as "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 Bitcoins. At the heart of this debate lies the question of whether Bitcoin can be a viable reserve asset. Proponents argue that Bitcoin can serve as a decentralized reserve asset, while opponents contend that Bitcoin lacks intrinsic value and its volatility would negatively impact the economy. Currently, this debate continues, and the ultimate outcome will depend on future perceptions and regulatory policies regarding Bitcoin.