#Economists oppose the Fed investing in Bitcoin.#
Hot Topic Overview
Overview
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, thus failing to improve productivity and living standards. He even called the idea of Bitcoin reserves "the dumbest idea." Nevertheless, Senator Cynthia Lummis still proposed the "Bitcoin Act" to establish a Bitcoin strategic reserve, aiming to purchase 1 million BTC. This debate has sparked questions about Bitcoin as a reserve asset and reflects the cautious attitude of traditional economics towards cryptocurrencies.
Ace Hot Topic Analysis
Analysis
Recently, old-school American economists have voiced strong opposition to the proposal to allocate US reserve funds to Bitcoin. Steve Hanke, a professor at Johns Hopkins University, argues that shifting funds to Bitcoin could hinder economic growth because these savings are not invested in real capital assets, which are crucial for improving living standards. He dismissed the idea of a Bitcoin reserve 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 by purchasing 1 million BTC. At the heart of this debate lies the question of whether Bitcoin can serve as a viable reserve asset and whether it is a distraction. Hanke believes that investing in Bitcoin would impede economic growth because these funds are not used to invest in productive assets, which are key to improving living standards. He emphasizes that Bitcoin is a distraction because it cannot contribute to economic growth in the same way as traditional assets.