#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 as these savings are not invested in real capital assets, thereby dragging down the economy. He emphasizes the importance of productivity improvement for better 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 the feasibility of Bitcoin as a reserve asset and reflects the cognitive divergence within the traditional economics community regarding cryptocurrencies.
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 dragging down the economy. He even called the idea of Bitcoin reserves "the dumbest idea." Hanke's views stand in stark contrast to Senator Cynthia Lummis's proposed "Bitcoin Act," which aims to establish a Bitcoin strategic reserve by purchasing 1 million Bitcoins. At the heart of this debate lies the question of whether Bitcoin can be a viable reserve asset. Proponents argue that Bitcoin can serve as a decentralized reserve asset, while opponents contend that Bitcoin lacks intrinsic value and is too volatile to be a reliable reserve asset. This debate reflects differing perspectives on the future of digital currencies and their role in the global economy.