#Economists oppose the Fed investing in Bitcoin.#
Hot Topic Overview
Overview
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. He emphasized the importance of improving productivity for improving living standards and called the idea of a Bitcoin reserve "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 widespread attention, raising questions about whether Bitcoin is a viable reserve asset.
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 living standards. He even 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 BTC. At the heart of this debate lies the question of whether Bitcoin can serve as a viable reserve asset. Proponents argue that Bitcoin's decentralized and anti-inflationary properties make it an ideal reserve asset, while opponents contend that Bitcoin's volatility, lack of real-world applications, and environmental impact render it unsuitable for this purpose. This debate will continue to shape the future of Bitcoin and reflects the evolving perception and attitude towards digital currencies.