The controversy of BTC: the potential and challenges as a strategic reserve asset for the United States

In the current economic environment, BTC's potential role as a strategic reserve asset is sparking heated discussions within and outside the Cryptocurrency industry.

Although it is seen as a tool to combat Inflation and provide stability to the economy, this view has been recognized by many people, believing that BTC has the potential to become a strategic reserve asset. But there are also voices of doubt, suggesting that including BTC in the US Federal Reserve system may not be a stable strategy.

This divergent view not only highlights the complex position of BTC in the financial field, but also reflects the profound differences in its role as a store of value and economic stabilizer.

Lack the input characteristics of goods and services in the real economy

As the discussion of BTC as a strategic reserve asset heats up, prominent banker and administrative lawyer Todd Phillips has sharply criticized it. Phillips' questioning points directly to the initiative of US Senator Cynthia Lummis, who is working to incorporate BTC into the mainstream financial system.

According to Fox Business News, Loomis is drafting a milestone legislation that could prompt the Federal Reserve (Fed) to purchase and hold BTC as a strategic reserve asset for the country. This move portends a major transformation in the Cryptocurrency industry.

It is reported that Lumis plans to announce the bill at this week's annual BTC conference, where former US President Donald Trump will give a speech. Lumis hopes that if Trump is re-elected, he will support the bill and its underlying ideas.

However, Phillips is skeptical of this. He compares BTC to oil (often referred to as 'liquid gold') and believes that BTC lacks the characteristic of being a necessary input or component in the production process of goods and services in the real world. Phillips believes that BTC does not possess the attributes required to be a strategic reserve asset because it is not an input to tangible products and services.

Phillips further emphasized that the proposal to make BTC a strategic reserve asset may actually be aimed at increasing the value of existing BTC holders. He pointed out, 'This proposal to make BTC a strategic reserve essentially calls on the Federal Reserve to purchase BTC in order to benefit speculators who already hold BTC.' This viewpoint has sparked a deeper discussion on the true value and purpose of BTC as a reserve asset.

BTC will be an intangible contributor to the US GDP

Todd Phillips's criticism of BTC as a strategic reserve asset has sparked rebuttals from heavyweight figures in the cryptocurrency world. Matthew Sigel, a leading figure in VanEck's digital asset research, is one of them. Sigel has questioned Phillips's position, suggesting that his viewpoint seems to imply that BTC lacks intrinsic value.

Siegler emphasizes that BTC not only has the unique ability to stabilize renewable energy grids, but also its intangible assets account for as much as 60% of the Gross Domestic Product (GDP) in the United States. He further pointed out that the Market Cap of BTC has exceeded $800 billion without the support of a traditional corporate structure, which in itself is a strong proof of its value.

In previous posts, Siegel has delved into and refuted the argument that encryption assets lack Intrinsic Value. He has listed a series of factors that challenge this argument, including the significant Market Cap that BTC has achieved without a traditional corporate structure, as well as its position as a leading asset over the past decade.

Siegels's argument not only defends the Intrinsic Value of BTC, but also provides a new perspective on BTC's role as part of the US GDP. This indicates that BTC is not just a speculative asset, but has already been integrated into and become an important part of the US economy.

Conclusion:

In this diverse and rapidly changing financial world, the discussion of BTC as a strategic reserve asset is not only an evaluation of a form of Digital Money, but also a test of the adaptability and innovation of the entire financial system. The debate sparked by BTC touches on the essence of currency, the source of value, and the true meaning of economic stability. With the continuous advancement of technology and the constant evolution of financial markets, the future role of BTC may continue to be controversial, but its position and influence in the modern economy cannot be ignored.

Ultimately, whether BTC can become a reliable strategic reserve asset will depend on how we understand and leverage its unique properties, and how we integrate it into the existing economic system. This requires the collective efforts of policymakers, financial experts, and the entire society to ensure that we can fully harness the potential of BTC while mitigating its risks. With a deeper understanding of the value and functionality of BTC, we hope to find a balance between financial innovation and economic stability, laying the foundation for future economic prosperity.