#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 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." 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 controversy over Bitcoin as a reserve asset, with its feasibility and whether it would be a distraction becoming the focus of attention.
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 economic development. He even dismissed the idea of Bitcoin reserves 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. The heart of this debate lies in whether Bitcoin can serve as a viable reserve asset. Proponents argue that Bitcoin's decentralized and inflation-resistant nature makes it a safe-haven asset. Opponents, however, contend that Bitcoin's volatile price and lack of real-world applications cannot support its value as a reserve asset. This debate will continue, and the ultimate outcome will depend on Bitcoin's future development and people's understanding of digital currencies.