A Game-Changer Or A Mere Election Gimmick?

Economists Skeptical of Trump’s Bitcoin Stockpile Plan: Game Changer or Just an Election Trick?

In a surprising move, former US President Donald Trump has proposed a plan to set up a national bitcoin stockpile if he is re-elected, an announcement that has stunned economists and financial experts.

What Happened: Trump announced his plan at the Bitcoin 2024 conference in Nashville, Tennessee, Wired reported on Thursday. He pledged to hold all bitcoins currently held or acquired by the U.S. government in the future, an estimated 210,000 bitcoins, worth about $14 billion.

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While the plan was well-received by conference attendees, economists like James Angel of Georgetown University expressed skepticism. Angel questioned the economic benefit of such a move and suggested it could serve primarily to win votes from bitcoin enthusiasts.

Trump’s proposal implies that bitcoin holdings in the U.S. will increase over time. However, the source of funding for additional purchases remains unclear. The options of raising taxes, accumulating debt, or printing more U.S. dollars appear to conflict with Trump’s goal of reducing inflation and the national debt.

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Despite the excitement in the bitcoin community, the plan has faced criticism for potentially benefiting a small subset of the population at the expense of others. Michael Green, chief strategist at asset management firm Simplify, likened the situation to the US government promising to overpay for real estate in California but not in any other state.

Additionally, if Trump’s plan is implemented, it could increase the government’s reliance on bitcoin mining companies that maintain the underlying network. This could potentially lead to the bitcoin mining industry becoming yet another special interest group that the U.S. government would have to bail out in the event of instability.

The future of Trump’s plan remains uncertain. Angel called Trump a “master demagogue” and suggested that the plan could go the way of Trump Airline, Trump Casino and Trump University, meaning it may not happen.

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This article, Economists Skeptical of Trump’s Bitcoin Stockpile Plan: A Game Changer or Just an Election Trick? was originally published on Benzinga.com

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