#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 would hinder economic growth because these savings are not invested in real capital assets, thus failing to improve productivity and subsequently impacting living standards. He even called the idea of Bitcoin reserves "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 discussions about 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, while productivity improvements are crucial for improving living standards. He even called the idea of a Bitcoin reserve "the dumbest idea." This view stands in stark contrast to the "Bitcoin Act" proposed by Senator Cynthia Lummis, which aims to establish a Bitcoin strategic reserve by purchasing 1 million Bitcoins. At the heart of this debate is whether Bitcoin can serve as a viable reserve asset. Supporters argue that Bitcoin can act as a decentralized, inflation-resistant asset, while opponents contend that Bitcoin lacks intrinsic value and its price volatility is too high to qualify as a reserve asset. This debate reflects different perspectives on the future direction of digital currencies and raises questions about the relationship between traditional financial systems and emerging technologies.