#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. Johns Hopkins University professor Steve Hanke believes that shifting funds to Bitcoin could hinder economic growth, as these savings are not invested in real capital assets. He emphasized the importance of improving productivity for improving living standards and called the idea of Bitcoin reserves "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 discussions about the feasibility of Bitcoin as a reserve asset and reflects the cautious attitude of traditional economics towards digital currencies.
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, as these savings are not invested in real capital assets, thus failing to improve productivity and ultimately impacting the improvement of living standards. He even called the idea of Bitcoin reserves "the stupidest idea." This view stands in stark contrast to Senator Cynthia Lummis' proposed "Bitcoin Act," which aims to establish a Bitcoin strategic reserve, purchasing 1 million BTC. The heart of this debate lies in whether Bitcoin can be a viable reserve asset. Supporters argue that Bitcoin's decentralized and anti-inflationary properties make it an ideal reserve asset, while opponents contend that Bitcoin's volatility and lack of real-world utility make it unsuitable as a reserve asset. Currently, this debate continues, and the ultimate outcome will depend on the judgment of Bitcoin's future development and applications.