#Economists oppose the Fed investing in Bitcoin.#
Hot Topic Overview
Overview
Recently, old-school American economists have voiced their opposition to the proposal of allocating US reserve funds to Bitcoin. Johns Hopkins University professor Steve Hanke 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" to establish a Bitcoin strategic reserve, aiming to purchase 1 million BTC. This debate has sparked reflection on the feasibility of Bitcoin as a reserve asset and its potential for 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, cannot improve productivity, and therefore cannot improve living standards. He even called the idea of a Bitcoin reserve "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 and purchase 1 million BTC. At the heart of this debate is the feasibility of Bitcoin as a reserve asset. Supporters argue that Bitcoin can serve as a decentralized reserve asset, while opponents argue that Bitcoin lacks real value and investing in it will hinder economic growth. Currently, this debate continues, and the final outcome remains to be seen.