#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 better living standards and calls the idea of Bitcoin reserves "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 controversy over 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, as 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, 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 nature and resistance to inflation make it a secure store of value. Opponents, however, contend that Bitcoin lacks intrinsic value and its price volatility makes it unsuitable as a stable and reliable reserve asset. This debate will continue, and the ultimate outcome will depend on a deeper assessment of Bitcoin's future development trends and its potential as a reserve asset.