#Economists oppose the Fed investing in Bitcoin.#

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, thus failing to promote productivity gains, which are key to improving living standards. He even dismissed the idea of Bitcoin reserves as "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 and purchase 1 million BTC. At the heart of this debate lies the question of whether Bitcoin can become a viable reserve asset and whether it would be a distraction. Opponents argue that Bitcoin lacks intrinsic value, its price volatility is too high to serve as a stable reserve asset, and it would divert funds from more productive investments. Supporters, on the other hand, believe that Bitcoin's decentralized, censorship-resistant, and scarce nature makes it an ideal reserve asset, and its price volatility is gradually decreasing. This debate reflects both concerns and expectations about the future direction of digital currencies, and it raises questions about the relationship between traditional financial systems and digital currencies.