#Economists oppose the Fed investing in Bitcoin.#
Hot Topic Overview
Overview
Recently, old-school economists in the US have voiced their opposition to the proposal of allocating US reserve funds to Bitcoin. Steve Hanke, a professor at Johns Hopkins University, argues that shifting funds to Bitcoin could hinder economic growth as these savings are not invested in real capital assets. He emphasizes the importance of productivity improvements for enhancing living standards and calls the idea of Bitcoin reserves "the dumbest idea." Despite this, Senator Cynthia Lummis has proposed the "Bitcoin Act" to establish a Bitcoin strategic reserve, aiming to purchase 1 million BTC. This debate has sparked discussions about whether Bitcoin is a viable reserve asset, with no consensus reached yet.
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, thus failing to improve productivity and ultimately impacting 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 by purchasing 1 million BTC. At the heart of this debate lies the question of whether Bitcoin can become a viable reserve asset. Proponents argue that Bitcoin can serve as a decentralized reserve asset, while opponents contend that Bitcoin lacks intrinsic value and cannot contribute to economic growth. This debate reflects concerns about the future direction of cryptocurrencies and the challenges they pose to the traditional financial system.