Lately, the discussions regarding Bitcoin as a reliable strategic reserve asset have garnered significant interest within the entire cryptocurrency industry due to its potential to serve as a hedge against inflation and economic stability. Even though most people see this as a notable idea, some believe BTC is an unreliable choice for a federal reserve asset.
As the topic heats up, Todd Phillips, a popular banking and administrative lawyer, has voiced his strong criticism toward Bitcoin’s potential as a reserve asset. The lawyer’s objections come in light of United States Senator Cynthia Lummis’ efforts to establish BTC as a mainstream financial asset.
According to a recent report from Fox Business, Lummis is preparing a new legislation that might drastically change the rapidly expanding cryptocurrency industry by requiring the Federal Reserve (Fed) to purchase and retain Bitcoin as a strategic reserve asset.
Fox Business reveals that the US Senator intends to unveil the new bill at the annual Bitcoin Conference scheduled to be held on Saturday, just before former US President Donald Trump’s anticipated speech. Lummis hopes that Trump will support the bill and the concept behind it, should he emerge as the new president of the nation.
Although the bill aims at providing stability to the US dollar and the nation’s capital market, Phillips believes that BTC does not possess the qualities to make this happen. Comparing BTC to petroleum often regarded as liquid Gold, Phillips claims the digital asset is nothing like the oil. He further noted that the latter part of Bitcoin is an input into tangible products and services, while the former is not an input into anything, suggesting BTC is an unreliable reserve asset.
The sole reason for making BTC a strategic reserve asset, highlighted by Phillips, is to push the coin’s value higher for those who currently own it. “The purpose of a strategic Bitcoin reserve is simply to require the Fed to buy Bitcoin, sending its price higher for speculators already holding,” he stated.
Todd Phillips’ criticism has attracted responses from major figures in the cryptocurrency industry, like VanEck‘s head of digital asset research, Matthew Sigel. Sigel has challenged the lawyer, saying that his objections almost implied that BTC has no intrinsic value. Meanwhile, BTC‘s unique capacity to stabilize the renewable-powered electrical grid, and intangible assets account for 60% of the US Gross Domestic Product (GDP).
He further drew attention to his previous post debunking the argument that the crypto asset lacks intrinsic value, where he listed a few factors that challenge this sentiment. These include an over $800 billion market cap without the help of traditional corporate structures, and being the leading asset of the last decade.
Featured image from LinkedIn, chart from Tradingview.com
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