#Economists oppose the Fed investing in Bitcoin.#
Hot Topic Overview
Overview
The debate about the US Treasury investing in Bitcoin is currently raging. Old-school economists, such as Johns Hopkins University professor Steve Hanke, are vehemently opposed to the idea. They argue that shifting funds to Bitcoin would hinder economic growth because these savings are not invested in real capital assets, thus failing to boost productivity and improve living standards. Hanke even called the idea of a Bitcoin reserve "the dumbest idea ever." On the other hand, Senator Cynthia Lummis has proposed the "Bitcoin Act," which aims to establish a Bitcoin strategic reserve, purchasing 1 million BTC. The debate continues, with differing opinions on whether Bitcoin can be a viable reserve asset or if it is merely a distraction.
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, which would fail to increase productivity and thus fail to improve living standards. He even called the idea of Bitcoin reserves "the stupidest idea." This view stands in stark contrast to the "Bitcoin Act" proposed by Senator Cynthia Lummis, which aims to establish a Bitcoin strategic reserve and purchase 1 million BTC. At the heart of this debate is whether Bitcoin can serve as a viable reserve asset. Supporters argue that Bitcoin's decentralized and anti-inflationary properties make it an ideal reserve asset, while opponents argue that Bitcoin lacks intrinsic value and is too volatile to be a reliable reserve asset. This debate will continue to influence the future development of Bitcoin and its position in the global financial system.