#Economists oppose the Fed investing in Bitcoin.#
Hot Topic Overview
Overview
Recently, old-school economists in the US 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 improvements for enhancing living standards and calls the idea of Bitcoin reserves "the dumbest idea." Despite this, Senator Cynthia Lummis has proposed the "Bitcoin Act," aiming to establish a Bitcoin strategic reserve by purchasing 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, which is key to improving living standards. 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, purchasing 1 million BTC. At the heart of this debate is whether Bitcoin can be a viable reserve asset and whether it will be a distraction. Supporters argue that Bitcoin can serve as a decentralized, inflation-resistant reserve asset, while opponents argue that it lacks intrinsic value and is too volatile to be a reliable reserve asset. This debate will continue, and the ultimate outcome will depend on the judgment of Bitcoin's future development and applications.