Lawrence Summers, former U.S. Treasury Secretary, criticized the proposal for a national Bitcoin reserve, calling it a “crazy” idea designed to please crypto industry supporters.
He questioned the logic behind the government holding Bitcoin, which he views as a volatile asset, instead of more traditional reserves like gold or oil.
While the U.S. has seized billions of dollars worth of Bitcoin through criminal investigations, some lawmakers, including Senator Cynthia Lummis, are advocating for the government to accumulate Bitcoin as a strategic asset. States like Pennsylvania are also exploring Bitcoin investments, but the idea of a national Bitcoin reserve remains controversial.
Summers and other experts, such as Avik Roy, argue that while a Bitcoin reserve might have some benefits, it can’t solve the country’s larger fiscal challenges like the national debt. However, some believe it could lead to a massive increase in Bitcoin’s value, with estimates suggesting it could reach $1 million per coin.
A few countries have already started incorporating Bitcoin into their reserves. El Salvador made Bitcoin legal tender in 2021, while Bhutan has invested in Bitcoin through mining operations. The U.K. has also built a Bitcoin reserve, aiming to become a global crypto hub.
U.S. Bitcoin exchange-traded funds (ETFs) have experienced their most extended period of withdrawals since launching in January 2024, with over $5.5 billion in outflows over the past five weeks.
Strategy, formerly known as MicroStrategy, has continued its aggressive Bitcoin accumulation, acquiring an additional 130 BTC for approximately $10.7 million.
South Korea’s central bank has ruled out adding Bitcoin to its national reserves, citing its extreme volatility as a key concern, according to a report by Korea Economic TV.
Bitcoin is struggling to break past $84,000, and with the U.S. stock market facing a sharp correction, bearish predictions are mounting.