#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 because these savings are not invested in real capital assets, thus failing to improve productivity and living standards. He even called the idea of a Bitcoin reserve "the dumbest idea." This controversy stems from Senator Cynthia Lummis's proposed "Bitcoin Act," which aims to establish a Bitcoin strategic reserve, purchasing 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 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 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 Senator Cynthia Lummis's proposed "Bitcoin Act," which aims to establish a Bitcoin strategic reserve and purchase 1 million BTC. 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 reserve asset, while opponents contend that Bitcoin lacks intrinsic value and could hinder economic development. Currently, this debate continues, and the ultimate outcome will depend on future perceptions and applications of Bitcoin.