#Economists oppose the Fed investing in Bitcoin.#
Hot Topic Overview
Overview
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. He emphasizes the importance of improving productivity for improving living standards and calls 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 reflection on the feasibility and value of Bitcoin as a reserve asset.
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, thus failing to improve productivity and ultimately dragging down the economy. 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 plans to purchase 1 million BTC. The core of this debate lies in whether Bitcoin can become a viable reserve asset. Opponents argue that Bitcoin lacks intrinsic value and its price volatility is too high to serve as a stable reserve asset. Supporters, on the other hand, believe that Bitcoin is decentralized, censorship-resistant, and has enormous potential for appreciation, making it a potential key component of the future financial system. Currently, this debate is ongoing, and the final outcome remains to be seen.