#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 could hinder economic growth as these savings are not invested in real capital assets. He emphasized the importance of productivity improvements 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 discussions about the feasibility of Bitcoin as a reserve asset and whether it would be a distraction.
Ace Hot Topic Analysis
Analysis
Recently, American economists have voiced their opposition to the proposal of allocating US reserve funds to Bitcoin. Steve Hanke, a professor at Johns Hopkins University, argues 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 enhancement for improving living standards and calls the idea of Bitcoin reserves "the dumbest idea." Hanke's views represent the prevailing opinion among traditional economists, who believe that Bitcoin lacks intrinsic value and its price volatility is too high for it to be a reliable reserve asset. On the other hand, Senator Cynthia Lummis' proposed "Bitcoin Act" aims to establish a Bitcoin strategic reserve, purchasing 1 million BTC, which has sparked debate about the feasibility of Bitcoin as a reserve asset. At the heart of this debate lies the value and stability of Bitcoin, as well as its impact on economic growth. Proponents argue that Bitcoin can serve as a decentralized reserve asset and provide a safe haven for investors. Opponents, however, contend that Bitcoin lacks intrinsic value, its price volatility is too high for it to be a reliable reserve asset, and it could hinder economic growth. This debate will continue, and the ultimate outcome will depend on the future development of Bitcoin and the market's recognition of its value.