Steve Hanke Blasts Strategic Bitcoin Reserve Concept: 'The Stupidest Idea'

Steve Hanke, professor of applied economics at Johns Hopkins University, has heavily criticized a possible strategic bitcoin reserve move in the U.S. Hanke stated that it is a stupid idea and would put “a drag” on the economy.

Economist Steve Hanke Opposes Strategic Bitcoin Reserve Proposal

Old-school economists have started criticizing the idea of allocating U.S. reserve funds into bitcoin. Steve Hanke, professor of applied economics at the Johns Hopkins University known for his currency reform work in developing countries, has recently commented on the concept, rebuking it heavily.

In a recent interview, Hanke blasted the possibility of establishing a strategic bitcoin reserve, stating that these funds could be allocated to other, more productive efforts.

Hanke declared:

The diversion of waiting or savings into bitcoin does what? Well, It puts a drag on the economy because those savings are not invested in real capital assets that produce things.

Hanke continued blasting this idea, comparing it to saving into Old Masters (classical art). He then directed the speech to the productivity issue, which numbers indicate has become a multi-trillion dollar problem in the U.S. and other advanced economies.

“If we don’t increase productivity then we have a real problem because that fundamentally is what underlies improved standards of living and prosperity in an economy as increases in productivity,” he stressed.

“I’m completely opposed to it. It is the stupidest idea,” Hanke concluded.

In July, Senator Cynthia Lummis introduced a strategic bitcoin stockpile proposal through the Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act. However, President Donald Trump’s victory at the polls and his bitcoin-friendly approach revived the idea, putting it in the spotlight again.

Read more: Senator Lummis Proposes Bitcoin Strategic Reserve Bill to Bolster US Economy

If passed, the act would involve purchasing 1 million BTC, capturing 5% of the total Bitcoin issuance to “mirror” the size and scope of gild reserve held in the U.S.

Hanke, a long-time bitcoin critic, has declared it was not a currency and had a “fundamental value of zero.” More recently, he also cited a study that links crypto ownership to psychopathic traits.

Read more: Economist Steve Hanke: Research Finds Crypto Owners Are Psychopaths