#Economists oppose the Fed investing in Bitcoin.#
Hot Topic Overview
Overview
The debate over whether the United States should invest its reserve funds in Bitcoin has intensified recently. Old-school economists, such as Johns Hopkins University professor Steve Hanke, strongly oppose 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." However, some, such as Senator Cynthia Lummis, have proposed establishing a Bitcoin strategic reserve through the "Bitcoin Act," aiming to purchase 1 million BTC. This debate has sparked discussions about the feasibility of Bitcoin as a reserve asset and whether 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, while productivity improvements are crucial for improving living standards. He even called the idea of a Bitcoin reserve "the stupidest 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 is whether Bitcoin can serve as a viable reserve asset. Opponents argue that Bitcoin lacks intrinsic value and its volatility is too high to serve as a stable reserve asset. Supporters, on the other hand, believe that Bitcoin's decentralized and censorship-resistant nature makes it a viable new reserve asset, bringing new vitality to the global economy. This debate will continue to spark reflection on digital currencies and their role in future economic systems.