#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 increase productivity and ultimately dragging down the economy. He even called the idea of Bitcoin reserves "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. This debate has sparked discussions about the feasibility of Bitcoin as a reserve asset and whether it would be 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 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 by purchasing 1 million BTC. At the heart of this debate is whether Bitcoin can become a viable reserve asset. Supporters argue that Bitcoin can serve as a decentralized reserve asset, while opponents argue that it is too volatile, lacks intrinsic value, and could hinder economic growth. Currently, this debate continues, and the final outcome remains to be seen.